This chapter explores the Regional Economic Resilience Indicator (RERI) which has been developed as a composite indicator of the resilience capacity of a region. It accounts for elements of the “resilience life cycle”, categorizing them into four dimensions: introduction, growth, maturity, decline or renewal. These dimensions are then linked to the respective slow burning and shock wave processes. The investigation reveals that resilience capacities accumulated in the long-run may not be adequately managed and may even be lost in the short-run when the shock intervenes. Precisely, EU-13 countries have been able to keep the capacities accumulated during the slow burning and use them to recover after the crisis, while EU-15 experienced greater difficulties in dealing with the shock, deteriorating or not perfectly using the capacities accumulated.
Nicola Pontarollo and Carolina Serpieri
Elton Beqiraj, Giovanni Di Bartolomeo, Marco Di Pietro and Carolina Serpieri
Focusing on NUTS2 regions of the Benelux area, we develop a methodology for measuring resilience in regional business cycles. We focus on the relative ability of regions to absorb business cycle shocks (recoverability) and their ability to isolate themselves from external disturbances (resistance). Based on Bayesian estimations of regional dynamic stochastic general equilibrium (DSGE) models, we focus upon output variability around its natural level. After estimating region-specific models by building counterfactual DSGE reference models, we disentangle the capacities for recovery and resistance in each region within the Benelux over the period 1981_2015. The results reveal very different capacities across the regions and highlight the significance of policy decisions taken in the aftermath of previous crises. We conclude by considering the implications for policy makers in the design of convergence policies and also raise methodological questions for further research.