Cornell University

This is a past event. Its details are archived for historical purposes.

The contact information may no longer be valid.

Please visit our current events listings to look for similar events by title, location, or venue.

Junior Recruitment Workshop: Federico Huneeus

Tuesday, February 12, 2019 at 11:40am to 1:10pm

Sage Hall, 141
Johnson Graduate School-Management, 106 Sage Hall, Ithaca, NY 14853-6201, USA

Federico Huneeus, Princeton University

Production Network Dynamics and the Propagation of Shocks

Abstract: This paper uses a firm-to-firm transaction dataset to evaluate quantitatively how shocks propagate through production networks when their underlying links are costly to form and adjust. I document a set of facts consistent with adjustment frictions in these relationships. In particular, these links react sluggishly to firm-specific international trade shocks and are unresponsive to small shocks but strongly responsive to large shocks. Guided by these facts, I develop a dynamic general equilibrium model with endogenous production networks where links have adjustment frictions. Solving for the links' dynamics with a large number of firms is made possible by leveraging the empirical sparsity of firm-to-firm links. To measure the aggregate relevance of these adjustment frictions, I estimate the model using a simulated method of moments and evaluate how international trade shocks during the Great Recession propagated in Chile. Without links' adjustment frictions, and thus with a totally flexible network, the output losses from these shocks would have been 30 percent lower. The application highlights the relevance that dynamics in firm-to-firm links has not only for firms' connectivity but also for how aggregate output responds to shocks.

Subscribe
Google Calendar iCal Outlook
Event Type

Seminar, Class/ Workshop

Departments

Economics

Tags

economics, EconSeminar, EconMetrics, EconMacro, EconPublic, EconIO, EconRecruit, EconBehave, EconMicro, EconLabor, EconAppliedMicro

Hashtag

#CornellEcon

Contact E-Mail

alg5@cornell.edu

Contact Name

Amy Moesch

Contact Phone

607-255-5617

Speaker

Federico Huneeus

Speaker Affiliation

Princeton University

Open To

Cornell Economics Community (List Serve Members)