Endogenous Growth in Production Networks

Stanislao Gualdi () and Antoine Mandel
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Stanislao Gualdi: CentraleSupélec, MICS - Mathématiques et Informatique pour la Complexité et les Systèmes - CentraleSupélec

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Abstract: We investigate the interplay between technological change and macroeconomic dynamics in an agent-based model of the formation of production networks. On the one hand, production networks form the structure that determines economic dynamics in the short run. On the other hand, their evolution reflects the long-term impacts of competition and innovation on the economy. We account for process innovation via increasing variety in the input mix and hence increasing connectivity in the network. In turn, product innovation induces a direct growth of the firm's productivity and the potential destruction of links. The interplay between both processes generate complex technological dynamics in which phases of process and product innovation successively dominate. The model reproduces a wealth of stylized facts about industrial dynamics and technological progress, in particular the persistence of heterogeneity among firms and Wright's law for the growth of productivity within a technological paradigm. We illustrate the potential of the model for the analysis of industrial policy via a preliminary set of policy experiments in which we investigate the impact on innovators' success of feed-in tariffs and of priority market access.

Keywords: Firms demographics; distribution of firms' size; Network formation; Scale-free networks; Production network; general equilibrium; disequilibrium; monopolistic competition; Zipf law (search for similar items in EconPapers)
Date: 2016-04
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01382483v1
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Citations: View citations in EconPapers (6)

Published in 2016

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Related works:
Journal Article: Endogenous growth in production networks (2019)
Working Paper: Endogenous growth in production networks (2019)
Working Paper: Endogenous growth in production networks (2019)
Working Paper: Endogenous growth in production networks (2019)
Working Paper: Endogenous Growth in Production Networks (2016)
Working Paper: Endogenous Growth in Production Networks (2016)
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