From Micro to Macro via Production Networks

Vasco M. Carvalho

No 793, Working Papers from Barcelona School of Economics

Abstract: 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. In this essay, I argue that this network perspective on production linkages can offer novel insights on the sources of aggregate fluctuations. To do this, I show (i) how production networks can be mapped to a standard general equilibrium setup; (ii) how to approach input-output from this networked perspective and (iii) how theory and data on production networks can be usefully combined to shed light on comovement and aggregate fluctuations.

Keywords: Business cycles; input-output linkages; production networks; comovement (search for similar items in EconPapers)
JEL-codes: D57 D85 E32 L14 (search for similar items in EconPapers)
Date: 2015-09
New Economics Papers: this item is included in nep-hme and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (267)

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