Heterogeneity of technological structures between EU countries: An application of complex systems methods to Input-Output Tables

The identification of the channels through which a given shock spreads to the rest of the economy, determining its final impact, is essential to formulate effective policy interventions. Input-output tables (IOTs) are widely used to detect the network of intersectoral relations of a country - i.e., its sectoral technological structure or domestic supply chains - and the role of different sectors in the propagation of a shock. However, the heterogeneity that characterize the technological structures of different countries is inevitably a source of complexity for the development of supranational and timely coordinated policies because it requires to analyse and interpret a large amount of information. This paper proposes a unique problem setting that aims to deal with this complexity by facilitating the analysis and visualization of similarities and differences among the technological structures of countries, relying on the identification of a small number of archetypes and showing how their interpretation could be exploited to support the definition of coordinated policy interventions. Specifically, non-negative matrix factorization is used to extract the archetypal matrices of the technological structures of the 28 European countries from IOTs, revealing dense intersectoral relationships and a low degree of heterogeneity between them. Then, random walk indicators are applied to study shock propagation within these archetypes, uncovering sectoral centralities. Finally, COVID-19 lockdown restrictions are analysed to exemplify the use of the proposed approach for coordinated policy action.

Responsiveness of open innovation to COVID-19 pandemic: The case of data for good.

Due to the COVID-19 pandemic, countries around the world are facing one of the most severe health and economic crises of recent history and human society is called to figure out effective responses. However, as current measures have not produced valuable solutions, a multidisciplinary and open approach, enabling collaborations across private and public organizations, is crucial to unleash successful contributions against the disease. Indeed, the COVID-19 represents a Grand Challenge to which joint forces and extension of disciplinary boundaries have been recognized as main imperatives. As a consequence, Open Innovation represents a promising solution to provide a fast recovery. In this paper we present a practical application of this approach, showing how knowledge sharing constitutes one of the main drivers to tackle pressing social needs. To demonstrate this, we propose a case study regarding a data sharing initiative promoted by Facebook, the Data For Good program. We leverage a large-scale dataset provided by Facebook to the research community to offer a representation of the evolution of the Italian mobility during the lockdown. We show that this repository allows to capture different patterns of movements on the territory with increasing levels of detail. We integrate this information with Open Data provided by the Lombardy region to illustrate how data sharing can also provide insights for private businesses and local authorities. Finally, we show how to interpret Data For Good initiatives in light of the Open Innovation Framework and discuss the barriers to adoption faced by public administrations regarding these practices.

Effects of mobility restrictions during COVID19 in Italy.

To reduce the spread and the effect of the COVID-19 global pandemic, non-pharmaceutical interventions have been adopted on multiple occasions by governments. In particular lockdown policies, i.e., generalized mobility restrictions, have been employed to fight the first wave of the pandemic. We analyze data reflecting mobility levels over time in Italy before, during and after the national lockdown, in order to assess some direct and indirect effects. By applying methodologies based on percolation and network science approaches, we find that the typical network characteristics, while very revealing, do not tell the whole story. In particular, the Italian mobility network during lockdown has been damaged much more than node- and edge-level metrics indicate. Additionally, many of the main Provinces of Italy are affected by the lockdown in a surprisingly similar fashion, despite their geographical and economic dissimilarity. Based on our findings we offer an approach to estimate unavailable high-resolution economic dimensions, such as real time Province-level GDP, based on easily measurable mobility information.

Socioeconomic differences and persistent segregation of Italian territories during COVID-19 pandemic.

Lockdowns implemented to address the COVID-19 pandemic have disrupted human mobility flows around the globe to an unprecedented extent and with economic consequences which are unevenly distributed across territories, firms and individuals. Here we study socioeconomic determinants of mobility disruption during both the lockdown and the recovery phases in Italy. For this purpose, we analyze a massive data set on Italian mobility from February to October 2020 and we combine it with detailed data on pre-existing local socioeconomic features of Italian administrative units. Using a set of unsupervised and supervised learning techniques, we reliably show that the least and the most affected areas persistently belong to two different clusters. Notably, the former cluster features significantly higher income per capita and lower income inequality than the latter. This distinction persists once the lockdown is lifted. The least affected areas display a swift (V-shaped) recovery in mobility patterns, while poorer, most affected areas experience a much slower (U-shaped) recovery: as of October 2020, their mobility was still significantly lower than pre-lockdown levels. These results are then detailed and confirmed with a quantile regression analysis. Our findings show that economic segregation has, thus, strengthened during the pandemic.

The impact of the SARS-CoV-2 pandemic on financial markets: a seismologic approach.

This work investigates financial volatility cascades generated by SARS-CoV-2 related news using concepts developed in the field of seismology. We analyze the impact of socio-economic and political announcements, as well as of financial stimulus disclosures, on the reference stock markets of the United States, United Kingdom, Spain, France, Germany and Italy. We quantify market efficiency in processing SARS-CoV-2 related news by means of the observed Omori power-law exponents and we relate these empirical regularities to investors' behavior through the lens of a stylized Agent-Based financial market model. The analysis reveals that financial markets may underreact to the announcements by taking a finite time to re-adjust prices, thus moving against the efficient market hypothesis. We observe that this empirical regularity can be related to the speculative behavior of market participants, whose willingness to switch toward better performing investment strategies, as well as their degree of reactivity to price trend or mispricing, can induce long-lasting volatility cascades.

After the lockdown: simulating mobility, public health and economic recovery scenarios.

The spread of SARS-COV-2 has affected many economic and social systems. This paper aims at estimating the impact on regional productive systems in Italy of the interplay between the epidemic and the mobility restriction measures put in place to contain the contagion. We focus then on the economic consequences of alternative lockdown lifting schemes. We leverage a massive dataset of human mobility which describes daily movements of over four million individuals in Italy and we model the epidemic spreading through a metapopulation SIR model, which provides the fraction of infected individuals in each Italian district. To quantify economic backslashes this information is combined with socio-economic data. We then carry out a scenario analysis to model the transition to a post-lockdown phase and analyze the economic outcomes derived from the interplay between (a) the timing and intensity of the release of mobility restrictions and (b) the corresponding scenarios on the severity of virus transmission rates. Using a simple model for the spreading disease and parsimonious assumptions on the relationship between the infection and the associated economic backlashes, we show how different policy schemes tend to induce heterogeneous distributions of losses at the regional level depending on mobility restrictions. Our work shed lights on how recovery policies need to balance the interplay between mobility flows of disposable workers and the diffusion of contagion.

Financial earthquakes: SARS-CoV-2 news shock propagation in stock and sovereign bond markets.

The SARS-CoV-2 epidemics outbreak has shocked global financial markets, inducing policymakers to put in place unprecedented interventions to inject liquidity and to counterbalance the negative impact on worldwide financial systems. Through the lens of statistical physics, we examine the financial volatility of the reference stock and bond markets of the United States, United Kingdom, Spain, France, Germany and Italy to quantify the effects of country-specific socio-economic and political announcements related to the epidemics. Main results show that financial markets exhibit heterogeneous behaviours towards news on the epidemics, with the Italian and German bond markets responding with major delays to shocks. Additionally, credit markets tend to be slower than equity markets in adjusting prices after shocks, hence being slower at incorporating the effects of such news.

Time, space and social interactions: exit mechanisms for the Covid-19 epidemics.

We develop a minimalist compartmental model to study the impact of mobility restrictions in Italy during the Covid-19 outbreak. We show that, while an early lockdown shifts the contagion in time, beyond a critical value of lockdown strength the epidemic tends to restart after lifting the restrictions. We characterize the relative importance of different lockdown lifting schemes by accounting for two fundamental sources of heterogeneity, i.e. geography and demography. First, we consider Italian Regions as separate administrative entities, in which social interactions between age classes occur. We show that, due to the sparsity of the inter-Regional mobility matrix, once started, the epidemic spreading tends to develop independently across areas, justifying the adoption of mobility restrictions targeted to individual Regions or clusters of Regions. Second, we show that social contacts between members of different age classes play a fundamental role and that interventions which target local behaviours and take into account the age structure of the population can provide a significant contribution to mitigate the epidemic spreading. Our model aims to provide a general framework, and it highlights the relevance of some key parameters on non-pharmaceutical interventions to contain the contagion.

Economic and social consequences of human mobility restrictions under COVID-19.

In response to the coronavirus disease 2019 (COVID-19) pandemic, several national governments have applied lockdown restrictions to reduce the infection rate. Here we perform a massive analysis on near-real-time Italian mobility data provided by Facebook to investigate how lockdown strategies affect economic conditions of individuals and local governments. We model the change in mobility as an exogenous shock similar to a natural disaster. We identify two ways through which mobility restrictions affect Italian citizens. First, we find that the impact of lockdown is stronger in municipalities with higher fiscal capacity. Second, we find evidence of a segregation effect, since mobility contraction is stronger in municipalities in which inequality is higher and for those where individuals have lower income per capita. Our results highlight both the social costs of lockdown and a challenge of unprecedented intensity: On the one hand, the crisis is inducing a sharp reduction of fiscal revenues for both national and local governments; on the other hand, a significant fiscal effort is needed to sustain the most fragile individuals and to mitigate the increase in poverty and inequality induced by the lockdown.