Working Paper: CEPR ID: DP13953
Authors: Julien Sauvagnat; Basile Grassi
Abstract: In this paper, we show how to combine data on input-output tables and recent insights from the theory of production networks in order to inform policy. We first describe the information contained in input-output tables compiled by statistical agencies, and show how to derive relevant statistics of production networks. We then discuss the implications of production networks for policy intervention in a series of domains, such as fiscal policy, industrial policy, or, finance. Finally, we present a quantitative exercise applied to French data in order to illustrate that production networks shape the overall impact of competition policy on the economy.
Keywords: Production Network; Input-Output; Inefficiencies; Policy; Fiscal Policy; Industrial Policy; Finance; Industrial Organisation
JEL Codes: L13; L14; E23
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Sector Centrality (R12) | GDP Impact (F69) |
| Productivity Shocks (O49) | GDP Impact (F69) |
| Central Sectors (L80) | Amplified Shock Effects (E32) |
| Reduction in Concentration Ratios (Transport Equipment Sector) (L99) | Increase in GDP (E20) |
| Improved Competition (L13) | Enhanced Economic Performance (O49) |