Centre for Development Economics
and
Department of Economics, Delhi School of Economics
ANNOUNCE A SEMINAR
When firms matter: Propagation of firm-level shocks through production networks
by
Girish Bahal
(University of Western Australia)
Friday, January 31 2020 at 3:05 P.M.
Venue: New Seminar Room (Room no. 116, First Floor)
Department of Economics, Delhi School of Economics
All are cordially invited
Abstract
Recent evidence shows how sector level shocks can propagate through the production network into aggregate fluctuations. Propagation of firm-level shocks, however, has been less studied. In this paper, we show how i) intersectoral firm-level network linkages between sectors and ii) switching rigidities between customer-supplier relation can explain how firm-level shocks can propagate into aggregate economy-wide fluctuations. This result holds even when the number of firms in an economy becomes arbitrarily large or when firms within a sector produce perfectly substitutable goods.