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Spillover (economics): Difference between revisions - Wikipedia

Spillover (economics): Difference between revisions

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=== Material-Flow Analyses (MFA) ===
These analyses track specific material flows along supply chains and across countries. The tracking is primarily done for raw or less processed commodities. It cannot be as globally comprehensive as MRIO, because it also suffers from the truncation problem like LCA.<ref name=":1" />
 
[[Material flow analysis|MFA]] is based on the quantification and measuring of matter and substances in relation to the processes in a system such as a city or country. It is confined to a specific period of time. Flows are expressed in kg/year or, alternatively, in kg/capita/year. MFA is based on the principle of matter conservation.
 
The aim is to identify problems and quantifying the exact impact of potential spillovers. However, it needs a large amount of data to accurately function and many countries do not have the data available to do such an analysis. On the other hand, MFA is commonly used especially in matters of [[Sanitation]] and can be used to determine the best sanitation technology. It’s especially well suited to planning and decision making. It’s been proven to be a suitable tool for detection of environmental problems and adequate solutions.
 
== Types of Indexes ==
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=== Global Commons Stewardship Index ===
Using the MRIO trade data, environmental research, and industrial ecology, the Global Commons Stewardship Index features a global ranking and detailed features for ten countries and regions (the USA, the EU, China, India, Japan, South Korea, Indonesia, the PhillipinesPhilippines, Brazil and Indonesia) alongside sector-specific analyses of spillovers embodied in trade flows.<ref name=":2">{{Cite web |title=Understanding the Spillover Effect |url=https://www.investopedia.com/terms/s/spillover-effect.asp |access-date=2024-04-08 |website=Investopedia |language=en}}</ref>
 
==Examples of spillover effects==
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=== Safe-Haven Economies ===
Certain developed economies are sensitive to some economic phenomena that can overwhelm spillover effects, regardless of their strenghtstrength. For example Japan, the United States, and the Eurozone, all influenced by spillover effects from China, this influence is partly offset by investors seeking safety in their respective markets during global market uncertainties.<ref name=":2" /> So, if one of the economies has some difficulties, investments shift to the remaining safe-havens.
 
This effect was seen with the U.S. investment inflows during the EU's struggles with the Greek debt crisis in 2015. As funds flowed into U.S. Treasuries, yields decreased, reducing borrowing costs for American consumers, borrowers, and businesses. This serves as an illustration of a positive spillover effect from the perspective of U.S. consumers.<ref name=":2" />