Cascades and Fluctuations in an Economy with an Endogenous Production Network.
This article studies the efficient allocation in an economy in which firms are connected through input–output linkages and must pay a fixed cost to produce. When economic conditions are poor, some firms might decide not to operate, thereby severing the links with their neighbours and changing the st...
| Publicado en: | Review of Economic Studies Vol. 93; no. 2; pp. 1354 - 1393 |
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| Formato: | Artículo |
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Oxford University Press / USA
Mar2026
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=192334036&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 192334036 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00346527 REM jtl: Review of Economic Studies issn: 00346527 maglogo: N pubinfo: dt: Mar2026 vid: 93 iid: 2 pid: 622 pub: Oxford University Press / USA artinfo: ui: 192334036 10.1093/restud/rdaf036 ppf: 1354 ppct: 39 formats: tig: atl: Cascades and Fluctuations in an Economy with an Endogenous Production Network. aug: au: Taschereau-Dumouchel, Mathieu affil: Cornell University, USA su: Plant shutdowns Business cycles Externalities Economic shock Global production networks sug: subj: Plant shutdowns Business cycles Externalities Economic shock Global production networks keyword: Cascades copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 Firm shutdowns inLanguage:en Production networks publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/restud/rdaf036 Cascades copyrightHolder:Review of Economic Studies Ltd copyrightYear:2026 Firm shutdowns inLanguage:en Production networks publisher:Oxford University Press sameAs:https://dx.doi.org/10.1093/restud/rdaf036 ab: This article studies the efficient allocation in an economy in which firms are connected through input–output linkages and must pay a fixed cost to produce. When economic conditions are poor, some firms might decide not to operate, thereby severing the links with their neighbours and changing the structure of the production network. Since producers benefit from having access to additional suppliers, nearby firms tend to operate, or not, together. As a result, the production network features clusters of operating firms, and the exit of a producer can create a cascade of firm shutdowns. While well-connected firms are better able to withstand shocks, they trigger larger cascades upon exit. The theory also predicts how the structure of the production network changes over the business cycle. As in the data, recessions are associated with more dispersed networks that feature fewer highly connected firms. In the calibrated economy, the endogenous reorganization of the network substantially dampens the impact of idiosyncratic shocks on aggregate fluctuations. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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