Les extendemos la invitación al seminario que organiza el Departamento de Economía, en el que se presentará el trabajo titulado "Business Cycle Asymmetry and Input-Output Structure: The Role of Firm-Level Networks".

Expone: José Miranda-Pinto, Economista Senior, Departamento de Estudios Económicos, Banco Central.

Coautores: Alvaro Silva y Eric Young

Abstract: We study the network origins of business cycle asymmetries. Using country level and firm level data on input-output linkages, we show that countries and firms with a larger number of production network links (network density) display a more negatively skewed distribution of output growth. We then show that at the onset of COVID-19, more interconnected firms in Chile suffered larger declines in output growth (sales, value-added, and employment). We construct a multisector model with input-output linkages and show that the relationship between output skewness and network density naturally arises once non-linearities in production are considered. In particular, in an economy with low production flexibility (inputs are gross complements), having more customers and suppliers becomes a risk that further amplifies the effects of negative productivity shocks. The opposite holds when firms display high production flexibility (inputs are gross substitutes), in which having more linkages is an opportunity to diversify the effects of negative productivity shocks. We calibrate the model to match the firm-to-firm network of the Chilean economy in 2019 and show that, consistent with the evidence, when hit by the calibrated COVID-19 shock, more connected firms saw larger declines in output. The size of the shock determines the strength of the relationship between interconnectedness and output decline, which highlights the importance of non-linearities and the limitations of local approximations. 

El formato será presencial y el seminario se desarrollará en la Sala P-304.

Saludos cordiales,

Dirección de Investigación