Contagion, Production, and Trade with Networked Oligopolies: A General Equilibrium Model

Avik Chakrabarti ()
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Avik Chakrabarti: University of Wisconsin-Milwaukee (UWM)

A chapter in Analytical Issues in Growth & Structural Change, Macroeconomy, Security, and Sustainability of India's Economic Development, 2026, pp 3-13 from Springer

Abstract: Abstract We study some unique implications of contagion for oligopolies with networks. In doing so, we build an attractable model of contagion with networked oligopolies in general equilibrium. We demonstrate that contagion reduces the diversity of production and, consequently, the extensive margins of exports and imports shrink. While contagion dampens the extensive margins of trade, the effect is stronger in the presence of domestic and/or foreign networks than it would be without networks. All else equal, the net effect of contagion on the extensive margins of trade depends on the relative economy of size of each network.

Keywords: Network; Contagion; Oligopoly; General equilibrium; L13; L20; F10; F12 (search for similar items in EconPapers)
Date: 2026
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Persistent link: https://EconPapers.repec.org/RePEc:spr:isbchp:978-981-95-5242-9_1

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DOI: 10.1007/978-981-95-5242-9_1

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