From Micro to Macro via Production Networks
Vasco M. Carvalho
No 793, Working Papers from Barcelona Graduate School of Economics
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: production networks; comovement; Business cycles; input-output linkages (search for similar items in EconPapers)
JEL-codes: D57 D85 E32 L14 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:793
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