Dr. Matthew Lyons (p)

In recent years volatility in the trade policy of the United States Government has led to greater cause for the evaluation of the exposure of regions to trade disruptions. In 2026, the United States proposed a 10 then 15 per cent global tariff on imports to the country. This paper investigates the exposure of Australian states and territories to United States import tariffs based on trade, price elasticities and supply chain data.
This paper presents AusRIO a newly development multi-regional input-output model for Australia. The model is constructed through a CHARM-based regionalisation of the 2022-23 national input-output tables published by the Australian Bureau of Statistics The paper details the methodological steps taken to construct the AusRIO MRIO system including the interstate trade linkages. Preliminary findings on the impact of tariffs on Agricultural exports find that the tariff shock generates an estimated $2.3 billion reduction in national output and approximately 2,790 full-time equivalent (FTE) jobs lost across Australia. The impacts are unevenly distributed across states, reflecting differences in export composition and supply-chain exposure. Queensland experiences the largest output decline (approximately $645 million and 770 FTE jobs), followed by Victoria ($781 million and 950 FTE jobs) and New South Wales ($555 million and 610 FTE jobs).

Dr Zsófia Vas (p), Prof Imre Lengyel

Following the 2008 financial crisis, the European Union (EU) has placed increasing emphasis on regional industrial specialisation and reindustrialisation. More recent challenges, including the green and digital transitions and the strengthening of defence capabilities, have further reinforced the strategic importance of industrial development. In Hungary, foreign direct investment (FDI) and EU cohesion funds have been the main drivers of industrial restructuring. The country currently has one of the highest shares of foreign-controlled manufacturing in the EU.
FDI has contributed to productivity growth and technological upgrading, particularly in manufacturing. At the same time, however, it has increased the risk that certain regions become locked into a regional “development trap”, where growth remains dependent on low-cost labour and assembly-based production with limited local innovation capacity.
This study examines whether FDI-led reindustrialisation has contributed to Hungary’s convergence towards the average level of the former EU12 member states. Using NUTS 3-level data, we identify five regional types characterised by different industrial development trajectories. Our results show that reindustrialisation supported Hungary’s catching-up process until around 2015. After that point, several FDI-intensive manufacturing regions appear to have entered a development trap, where weak innovation capacities constrain further upgrading and growth.
We argue that the current pattern of reindustrialisation in Hungary may reinforce long-term structural vulnerabilities in affected regions and may also slow the country’s overall convergence with the EU average.

Dr. Andrea Diaz Rincon (p), Aurelien Genty, Juan Carlos Ruiz-Garcia, Wouter Vergote

Standard input-output tables aggregate heterogeneous production activities into broad sectors, obscuring meaningful differences across subsectors. This paper develops a novel econometric methodology for disaggregating input-output sectors by exploiting temporal variation of production, trade and input-output data to recover technical coefficients that preserve aggregate accounting identities while revealing hidden heterogeneity. The method is illustrated using FIGARO inter-country input-output tables (2017–2022), disaggregating the EU’s C29 automotive sector into the manufacturing of internal combustion engine vehicles (ICEs), electric vehicles (EVs), and automotive parts. Our results show that, while aggregate import dependence in the sector stands at 11%, this masks substantial variation at the subsector level: 29% for EVs versus 13% for ICEs. A counterfactual decomposition shows that approximately 80% of this gap reflects shifts in global value chain organization (i.e., greater outsourcing by EV producers) while only 20% stems from a technology-driven competitive disadvantage in inputs, such as batteries. These findings suggest the EU’s higher foreign dependence in EV production is driven primarily by sourcing strategies, with important implications for industrial policy and strategic autonomy.

Dylan Jong, Steven Craig (p)

This paper empirically estimates the fiscal response of local governments to a manufacturing boom. Some central governments, including the US, are pursuing policies to re-shore manufacturing from abroad. One of the potential effects that has not factored into the calculus of this policy choice is the impact on local governments. We use the oil fracking boom in Texas to specifically identify how local governments in a developed country respond to both the burden, and opportunity, of this potentially major change in their local fiscal environment. Specifically, we use difference in differences estimation to identify impacts for both local general purpose governments, as well as local single purpose school districts, and argue we expect these two types of local governments to significantly differ in how they are affected. In particular, general purpose cities are found to have enlarged revenues, but much of the larger revenues are absorbed at least in the short run by the burden from creating new infrastructure. Conversely, school districts only have the fiscal burden of an increase in school attendance from the small permanent workforce, while benefitting from the larger long run change in the tax base. The results emphasize the heterogenous effects on local governments, none of which are small