Analysis of Interdependencies Between Italy's Economic Sectors

The infrastructure sectors of developed countries have direct and indirect interdependencies. These interdependencies make national infrastructures extremely prone to the cascading effects of perturbations or failures. A negative event that reduces the operability of one infrastructure sector rapidly spreads to other sectors and back to the original sector in a feedback loop, amplifying the negative consequences throughout the national economy. This paper uses the Input-output Inoperability Model (IIM) to analyze interdependencies in Italy’s economic sectors. Economic data from 1995 to 2003 provided by the Italian National Institute of Statistics (ISTAT) is used to investigate the interdependencies in 57 sectors. The results demonstrate that interdependencies between economic sectors have an overall increasing trend, which can dramatically enhance the negative consequences of any sector perturbation or failure.Keywords: Italy, economic sectors, interdependencies, input-output inoperability model