Spatial Economic Structure and Structural Changes in the EC: Feedback Loop Input-Output Analysis

A formal analysis of the spatial economic structure of the EC requires the integration of input-output data and intra-EC trade data. Such data are available in a set of intercountry EC input-output tables for 1970, 1975 and 1980. The present paper employs a hierarchical decomposition of intercountry economic transactions into self-affecting feedback loops. The first two intercountry feedback loops for 1975 have the same structure but show opposite directions of the intercountry flows. They break up into two smaller subloops. The first subloop includes 40% of the overall intercountry flows and consists of (West) Germany, France, The Netherlands and Belgium/Luxembourg. The second subloop includes 5% and consists of Italy, the UK, Denmark and Ireland. Hence, the analysis reveals a remarkable core-ring hierarchy. The core is shown to be present in 1970 also, but the 1975 ring dissolves in 1980 when the three new member states become better integrated with the rest of the EC.