Martina Sartori (University of Trento) on "Input-output Linkages and the Propagation of Domestic Productivity Shocks: Assessing Alternative Theories with Stochastic Simulation"

Speaker:  Martina Sartori - University of Trento
  Wednesday, January 20, 2016 at 12:30 PM Polo Santa Marta, Via Cantarane 24, Stanza 1.59
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 find that the variability of the GDP, induced by sectoral shocks, is basically determined by the degree of industrial concentration as measured by the Herfindahl index of indus- trial value added. The degree of centrality in inter-industrial connectivity, measured by the standard deviation of second order degrees, is mildly sig- nificant, but it is also correlated with the industrial concentration index. After controlling for the correlation effect, we find that connectivity turns out to be statistically significant, although less so than granularity.

Programme Director
Diego Lubian

Publication date
July 16, 2015