Working Paper: CEPR ID: DP13421
Authors: Vasco M. Carvalho; Alireza Tahbaz-Salehi
Abstract: This article reviews the literature on production networks in macroeconomics. It presents the theoretical foundations for the role of input-output linkages as a shock propagation channel and as a mechanism for transforming microeconomic shocks into macroeconomic fluctuations. The article also provides a brief guide to the growing literature that explores these themes empirically and quantitatively.
Keywords: networks; input-output linkages; shock propagation
JEL Codes: No JEL codes provided
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| productivity shocks in industry j (L69) | output of other industries (L69) |
| negative shock to industry j (L89) | increase in price of good j (E30) |
| increase in price of good j (E30) | adverse impact on industries relying on it as input (F69) |
| demand shocks (E39) | affect suppliers (L14) |