Next Wednesday, March 19th, between 1:00 PM and 2:00 PM, ISEG's Amphitheater 3 (Quelhas Building, 4th Floor) will once again host one of the sessions of the 2nd Semester of the ISEG Research Seminars.
This session's speaker will be Professor Francisco Queirós, which will present the paper 'Production networks, time to build and endogenous oscillations', which he co-authored. The abstract can be found below.
The 2nd Semester Research Seminars will be held weekly up until 4 June and will feature members of ISEG's faculty, as well as from other Portuguese and international universities. Further information HERE.
Free admission.
Abstract
We study how sector-specific shocks propagate in a production economy with input-output linkages and heterogeneous time to build. We show that, depending on the sector and network characteristics, one-time idiosyncratic shocks can induce a non-monotonic response of aggregate output as it converges back to steady state - a phenomenon we term 'endogenous oscillations' - and get amplified over time. We study the conditions on the network structure that generate this behavior. We introduce a measure to quantify the magnitude of such endogenous oscillations generated by a single small productivity shock. We quantify the model on US input-output data, showing that for some sectors a single shock can generate aggregate fluctuations. In particular, the magnitude of oscillations is twice as large as it would be if convergence to the steady state were always monotonic.