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Author: Michael T. K. Horvath Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The traditional argument against the relevance of sector-specific shocks for the aggregate phenomenon of business cycles invokes the law of large numbers: positive shocks in some sectors are offset by negative shocks in other sectors. This paper hypothesizes that the law of large numbers may be postponed if the nature of sectoral interactions provides a synchronizing force, heightening co-movement in sectoral production. The analysis is performed within the context of a multi-sector model similar in spirit to that of Long and Plosser (1983). The paper explores the role limited interaction between sectors plays in determining the response of the aggregate economy from sector-specific disturbances. A feature of limited interaction that the paper stresses is that it implies few possibilities of substitution among intermediate inputs and that this increases sectoral co-movement and hence aggregate volatility. A low degree of sectoral interaction is characterized by a sparse input-use matrix. The rate at which the law of large numbers applies for increasing levels of disaggregation is shown to be controlled by the rate of increase in the number of predominantly full rows in the input-use matrix rather than by the rate of increase in the total number of sectors.Investigations of actual input-use matrices from the U.S. economy reveal that the number of full rows increases much slower than the total number of rows upon disaggregation, and when these input-use matrices are used to parameterize the model, aggregate volatility from sectoral shocks declines at a slower rate than that implied by the law of large numbers.
Author: Michael T. K. Horvath Publisher: ISBN: Category : Languages : en Pages : 0
Book Description
The traditional argument against the relevance of sector-specific shocks for the aggregate phenomenon of business cycles invokes the law of large numbers: positive shocks in some sectors are offset by negative shocks in other sectors. This paper hypothesizes that the law of large numbers may be postponed if the nature of sectoral interactions provides a synchronizing force, heightening co-movement in sectoral production. The analysis is performed within the context of a multi-sector model similar in spirit to that of Long and Plosser (1983). The paper explores the role limited interaction between sectors plays in determining the response of the aggregate economy from sector-specific disturbances. A feature of limited interaction that the paper stresses is that it implies few possibilities of substitution among intermediate inputs and that this increases sectoral co-movement and hence aggregate volatility. A low degree of sectoral interaction is characterized by a sparse input-use matrix. The rate at which the law of large numbers applies for increasing levels of disaggregation is shown to be controlled by the rate of increase in the number of predominantly full rows in the input-use matrix rather than by the rate of increase in the total number of sectors.Investigations of actual input-use matrices from the U.S. economy reveal that the number of full rows increases much slower than the total number of rows upon disaggregation, and when these input-use matrices are used to parameterize the model, aggregate volatility from sectoral shocks declines at a slower rate than that implied by the law of large numbers.
Author: Hannes Boehm Publisher: ISBN: Category : Languages : en Pages :
Book Description
We analyze whether financial integration between countries leads to converging or diverging business cycles using a dynamic spatial model. Our model allows for contemporaneous spillovers of shocks to GDP growth between countries that are financially integrated and delivers a scalar measure of the spillover intensity at each point in time. For a financial network of ten European countries from 1996-2017, we find that the spillover effects are positive on average but much larger during periods of financial stress, pointing towards stronger business cycle synchronization. Dismantling GDP growth into value added growth of ten major industries, we observe that some sectors are strongly affected by positive spillovers (wholesale & retail trade, industrial production), others only to a weaker degree (agriculture, construction, finance), while more nationally influenced industries show no evidence for significant spillover effects (public administration, arts & entertainment, real estate).
Author: Hannes Böhm Publisher: ISBN: Category : Languages : en Pages :
Book Description
We analyse whether financial integration between countries leads to converging or diverging business cycles using a dynamic spatial model. Our model allows for contemporaneous spillovers of shocks to GDP growth between countries that are financially integrated and delivers a scalar measure of the spillover intensity at each point in time. For a financial network of ten European countries from 1996-2017, we find that the spillover effects are positive on average but much larger during periods of financial stress, pointing towards stronger business cycle synchronisation. Dismantling GDP growth into value added growth of ten major industries, we observe that some sectors are strongly affected by positive spillovers (wholesale & retail trade, industrial production), others only to a weaker degree (agriculture, construction, finance), while more nationally influenced industries show no evidence for significant spillover effects (public administration, arts & entertainment, real estate).
Author: Hector Perez-Saiz Publisher: International Monetary Fund ISBN: 1498324487 Category : Business & Economics Languages : en Pages : 37
Book Description
We propose a simple macroeconomic model with input-output sectoral linkages based on Acemoglu et al. (2016) to quantify how changes in aggregate demand due to additional income from household’s remittances propagates through the network of input-output linkages in Sub-Saharan African countries. We first propose two network centrality measures to assess the role of some sectors as key input providers in the economy. Then, we use these measures to quantify the effect of sectoral linkages on sectoral and total output following an increase in remittances inflows. Our empirical results suggest that the effects of remittances on recipient economies increase with the degree of linkages across sectors, which is especially prominent in the case of the financial intermediation sector. Our paper contributes to the emerging macroeconomic literature on the propagation of shocks across sectors and the implications for the whole economy.
Author: Claudio Raddatz Publisher: World Bank Publications ISBN: Category : Languages : en Pages : 53
Book Description
This paper provides evidence of the presence and relevance of the credit chain propagation and amplification mechanism described by Kiyotaki and Moore (1997) by looking at its implications for the correlation of industries. In particular, it tests the hypothesis that an increase in the use of trade credit, along the input-output chain linking two industries, results in an increase in their output correlation using detailed data on the correlations and input-output relations of 378 manufacturing industry pairs across 43 countries with different degrees of use of trade credit. The results provide strong support for this hypothesis and indicate that the mechanism is quantitatively relevant.
Author: Bernd Süssmuth Publisher: Springer Science & Business Media ISBN: 3790827185 Category : Business & Economics Languages : en Pages : 167
Book Description
The book provides a thorough and sophisticated descriptive analysis of business cycles in a historical perspective. The study is based on the latest available time series as well as latest techniques from the frequency domain. A combined univariate and bivariate analysis is conducted on the national as well as supranational (G7- and Euro-Area wide) level. Issues of stability, volatility, and cyclicality are investigated jointly. An extensive analysis of US manufacturing investment series on the fairly disaggregated four-digit level highlights the limits of linear models to capture the sectoral aggregation process. Synchronization is modelled by a mode-locking mechanism of industrial investment cycles induced by informational externalities. The model in its stochastic version is numerically simulated to assess an agreement between model and data.
Author: Alan A. Rabin Publisher: CRC Press ISBN: 9780824707811 Category : Political Science Languages : en Pages : 1848
Book Description
Examines the politics of economic policy, focusing on forecasting, inflation, interest rates, market expectations, financial crises, disruptions in global markets, and tax policy, as well as state and local government budgeting, financial management, and policy initiatives for development and growth.
Author: Jack Rabin Publisher: CRC Press ISBN: 0585425515 Category : Business & Economics Languages : en Pages : 1009
Book Description
This handbook explains the development and implementation of monetary policy. It examines theories and issues related to the preservation of economic activity and explores why the preservation of economic stability is a principal goal of public policy.
Author: Akira Namatame Publisher: Springer Science & Business Media ISBN: 3540287272 Category : Business & Economics Languages : en Pages : 345
Book Description
Understanding the mechanism of a socio-economic system requires more than an understanding of the individuals that comprise the system. It also requires understanding how individuals interact with each other, and how the agg- gated outcome can be more than the sum of individual behaviors. This book contains the papers fostering the formation of an active multi-disciplinary community on socio-economic systems with the exciting new ?elds of age- based modeling and econophysics. We especially intend to increase the awareness of researchers in many ?elds with sharing the common view many economic and social activities as collectives of a large-scale heterogeneous and interacting agents. Economists seek to understand not only how individuals behave but also how the interaction of many individuals leads to complex outcomes. Age- based modeling is a method for studying socio-economic systems exhibiting the following two properties: (1) the system is composed of interacting agents, and (2) the system exhibits emergent properties, that is, properties arising from the interactions of the agents that cannot be deduced simply by agg- gating the properties of the system’s components. When the interaction of the agents is contingent on past experience, and especially when the agents continually adapt to that experience, mathematical analysis is typically very limited in its ability to derive the outcome.
Author: Michael T. K. Horvath
Author: Michael T. K. Horvath
Author: Hannes Boehm
Author: Hannes Böhm
Author: Hector Perez-Saiz
Author: Claudio Raddatz
Author: Bernd Süssmuth
Author: Alan A. Rabin
Author: Eric V. Swanson
Author: Jack Rabin
Author: Akira Namatame