2016
DOI: 10.1080/09535314.2015.1132194
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Input–output linkages and the propagation of domestic productivity shocks: assessing alternative theories with stochastic simulation

Abstract: Relatively small sectoral productivity shocks could lead to sizable macroeconomic variability. Whereas most contributions in the literature analyze the issue of aggregate sensitivity using simple general equilibrium models, a novel approach is proposed in this paper, based on stochastic simulations with a global CGE model. We estimate the statistical distribution of the real GDP in 109 countries, assuming that the productivities of the industrial value added composites are identically and independently distrib… Show more

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Cited by 13 publications
(5 citation statements)
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“…Since the contributions of Leontief () and Hirschmann (), the idea of input–output linkages as a key channel through which shocks propagate throughout the economy has been explored mainly in the real business cycle literature (e.g., Horvath, , ; Long & Plosser, ; Shea, ). Recently, several papers have revisited the argument, proposing new approaches and perspectives (see Roson & Sartori, for a wide review). For example, Gabaix () finds that the distribution of firm size in an economy is typically fat‐tailed.…”
Section: Propagation Of Shocks and Key Sectors In Input‐output Networmentioning
confidence: 99%
“…Since the contributions of Leontief () and Hirschmann (), the idea of input–output linkages as a key channel through which shocks propagate throughout the economy has been explored mainly in the real business cycle literature (e.g., Horvath, , ; Long & Plosser, ; Shea, ). Recently, several papers have revisited the argument, proposing new approaches and perspectives (see Roson & Sartori, for a wide review). For example, Gabaix () finds that the distribution of firm size in an economy is typically fat‐tailed.…”
Section: Propagation Of Shocks and Key Sectors In Input‐output Networmentioning
confidence: 99%
“…Long and Plosser, 1983;Horvath, 1998Horvath, , 2000Shea, 2002). Recently, several papers have revisited the argument, proposing new approaches and perspectives (see Roson and Sartori, 2016 for a wide review). For example, Gabaix (2011) finds that the distribution of firm size in an economy is typically fat-tailed.…”
Section: Propagation Of Shocks and Key Sectors In Input-output Network: A Short Literature Reviewmentioning
confidence: 99%
“…Recent literature on the economy-wide effects of innovations relying on regional IO analysis shows that this is a research topic of increasing interest among academics. Relevant examples are Roson and Sartori (2016), who study whether relatively small productivity shocks could lead to sizable macroeconomic variability. They find that the variability of GDP, induced by sectoral shocks, is basically determined by the degree of industrial concentration in terms of value-added.…”
Section: Introductionmentioning
confidence: 99%