Analyses of aggregate fluctuations of firm production network based on the self-organized criticality model

Hiroyasu Inoue ()

Evolutionary and Institutional Economics Review, 2016, vol. 13, issue 2, No 6, 383-396

Abstract: Abstract This study examines how consecutive productions in firms occur when triggered by demand shocks, which can be rephrased by control of the economy or fiscal policy. We use the production-inventory model and observed data that exhaustively include a production network of Japanese firms. We obtain the following results. (1) The size of consecutive productions follows a power law. (2) The mean sizes of consecutive productions for industries are diverse; however, their standard deviations are sufficiently large that the difference in the mean become less important. (3) We compare the simulation with an input–output table and with the actual policies; they are compatible.

Keywords: Aggregate fluctuation; Demand; Network; Firm; Production; Inventory (search for similar items in EconPapers)
JEL-codes: D22 E32 H32 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s40844-016-0052-3

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