Echoes and Delays: Time-to-build in Production Networks

Mathieu Taschereau-Dumouchel and Edouard Schaal

No 1482, Working Papers from Barcelona School of Economics

Abstract: We study how time-to-build and delivery lags affect the propagation of sectoral and aggregate shocks in an economy with input-output linkages. Time-to-build signiï¬ cantly contributes to the persistence of shocks, with highly heterogeneous effects across sectors. We analyze delay shocks and demonstrate that bottlenecks can be identiï¬ ed by the product of a sector's supplier and buyer centralities. Shocks propagate asynchronously through the network, generating endogenous fluctuations via an echo effect. These fluctuations arise due to the presence of loops in the network. We show that the Fourier spectrum of sectoral and aggregate output can be predicted from the durations and weights of the network's dominant cycles. Sectoral comovements are complex and can be decomposed into the network's dominant walks.

Keywords: Business cycles; endogenous fluctuations; networks; time-to-build (search for similar items in EconPapers)
JEL-codes: C67 D57 D85 E23 E32 (search for similar items in EconPapers)
Date: 2025-03
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:1482

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