Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7374694 | Physica A: Statistical Mechanics and its Applications | 2018 | 14 Pages |
Abstract
We model an economy-wide production network by cascading binary compounding functions, based on the sequential processing nature of the production activities. As we observe a hierarchy among the intermediate processes spanning the empirical input-output transactions, we utilize a stylized sequence of processes for modeling the intra-sectoral production activities. Under the productivity growth that we measure jointly with the state-restoring elasticity parameters for each sectoral activity, the network of production completely replicates the records of multi-sectoral general equilibrium prices and shares for all factor inputs observed in two temporally distant states. Thereupon, we study propagation of a small exogenous productivity shock onto the structure of production networks by way of hierarchical clustering.
Related Topics
Physical Sciences and Engineering
Mathematics
Mathematical Physics
Authors
Satoshi Nakano, Kazuhiko Nishimura,