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Production Networks In Macroeconomics - People

Principal Investigator:
Professor Vasco Carvalho

Production Networks In Macroeconomics - Details

Title: Production Networks In Macroeconomics

Sponsor: EC FP7 ERC SIRG

Description: A modern economy is an intricately linked web of specialized production units, each relying on the flow of inputs from their suppliers to produce their own output which, in turn, is routed towards other downstream units. Recent work in economics stresses that the structure of this production network is key in determining whether and how microeconomic shocks – affecting only a particular firm or technology – can propagate throughout the economy and shape aggregate outcomes. If this is the case, understanding the structure of this production network can better inform both academics on the origins of aggregate fluctuations and policymakers on how to prepare for and recover from adverse shocks that disrupt these production chains.

This emerging literature on the role of production networks in macroeconomic fluctuations has opened up the possibility of tracing back the origins of business cycles to disaggregated technologies interacting through input-supply relations. However, as we further our understanding of how production chains can affect aggregate outcomes, the need for convincing empirical evidence on whether the mechanisms emphasized by theory are indeed borne out in the data becomes first-order. This is the first aim of the macronets project.

At the same time, once one recognizes that the network structure of input-supply relations is linked to macroeconomic outcomes a more ambitious set of questions emerges. What determines the structure of these production networks? How do they evolve over time? The second aim of the macronets project revolves around these questions.

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Macroeconomics Research Group

Edouard Schaal - CANCELLED
Tuesday 29th May 2018 4:00pm
Meade Room,

Recent Publications

Rendahl, P. Fiscal policy in an unemployment crisis Review of Economic Studies [2016]

Cavalcanti, T. V. D. On the determinants of slum formation Economic Journal [2018]

Latest CWPE


China's Slowdown and Global Financial Market Volatility: Is World Growth Losing Out?, Cashin, P., Mohaddes, K. and Raissi, M.


Aggregate and Firm level volatility: the role of acquisitions and disposals., Devonald, L., Higson, C., Holly, S.


Can Italy Grow Out of Its NPL Overhang? A Panel Threshold Analysis , Mohaddes, K., Raissi, M. and Weber, A.