From Micro to Macro via production networks
Journal of Economic Perspectives
American Economic Association
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Pereira Marques de Carvalho, V. (2014). From Micro to Macro via production networks. Journal of Economic Perspectives, 28 23-48. https://doi.org/10.1257/jep.28.4.23
A modern economy is an intricately linked web of specialized production units, each relying on the ow 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 perpective on production linkages can o¤er novel insights on the sources of aggregate uctuations. 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 usefuly combined to shed light on comovement and aggregate uctuations.
Production Networks, Comovement, Business Cycles, Input-Output Linkages
I would like to acknowledge the nancial support of the European Research Council under the grant "Production Networks in Macroeconomics", #337054, The Cambridge-INET Institute and The Keynes Fellowship at the University of Cambridge.
European Research Council (337054)
External DOI: https://doi.org/10.1257/jep.28.4.23
This record's URL: https://www.repository.cam.ac.uk/handle/1810/246199