SNOW: a general equilibrium model of Structural Network Organization of theWorld economy

Davide Suverato (), Lionel Fontagné, Riccardo Norbiato (), Mathieu Parenti (), Gianluca Santoni () and Balthazar de Vaulchier
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Davide Suverato: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Riccardo Norbiato: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Mathieu Parenti: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Gianluca Santoni: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris
Balthazar de Vaulchier: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement - ENPC - École nationale des ponts et chaussées - IP Paris - Institut Polytechnique de Paris

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Abstract: We introduce SNOW (Structural Network Organization of the World economy), a next-generation quantitative trade model, network-based general equilibrium framework designed to capture the complex propagation of shocks through global value chains (GVCs). Unlike existing models, SNOW integrates micro-founded selection of products at the input-output level, country-and product-specific CES technologies with fully endogenous input cost shares, and a four-dimensional representation of trade barriers and policy shocks that vary by origin, destination, sourcing sector, and using sector. By preserving the full nonlinear structure of general equilibrium responses, SNOW can simulate large shocks and conduct structural counterfactual analysis of policy. By treating the observed input-output network as the equilibrium outcome of an underlying production system, SNOW provides a counterfactual data-generating process for GVCs, allowing shocks to trade costs, technologies, and policies to generate counterfactual endogenous responses in production, input sourcing, trade, and value added.

Keywords: Global Value Chains; Input-Output; New Quantitative trade Models (search for similar items in EconPapers)
Date: 2026-09-22
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-05759001v1
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