Estimating General Equilibrium Spillovers of Large-Scale Shocks

Kilian Huber

No 15943, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Large-scale shocks directly affect some firms and households and indirectly impact others through general equilibrium spillovers. In this paper, I describe how researchers can directly estimate spillovers using quasi-experimental or experimental variation. I then argue that spillover estimates suffer from distinct sources of mechanical bias that standard empirical tools cannot resolve. These biases are particularly relevant in finance and macroeconomics where multiple spillover channels and nonlinear effects are common. I offer guidance on how to detect and overcome mechanical biases. An application and several examples highlight that the suggested methods are broadly relevant and can inform policy and multiplier calculations.

Keywords: Spillovers; Estimation; General equilibrium effects; Macroeconomic shocks; Financial shocks (search for similar items in EconPapers)
Date: 2021-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://cepr.org/publications/DP15943 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
Working Paper: Estimating General Equilibrium Spillovers of Large-Scale Shocks (2022)
Working Paper: Estimating General Equilibrium Spillovers of Large-Scale Shocks (2021)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:15943

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP15943

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().