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Production networks and economic policy

Author

Listed:
  • Basile Grassi
  • Julien Sauvagnat

Abstract

In this paper, we show how to combine data on input–output tables and recent insights from the theory of production networks in order to inform policy. We first describe the information contained in input–output tables compiled by statistical agencies, and show how to derive relevant statistics of production networks. We then discuss the implications of production networks for policy intervention in a series of domains, such as fiscal policy, industrial policy, or, finance. Finally, we present a quantitative exercise applied to French data in order to illustrate that production networks shape the overall impact of competition policy on the economy.

Suggested Citation

  • Basile Grassi & Julien Sauvagnat, 2019. "Production networks and economic policy," Oxford Review of Economic Policy, Oxford University Press, vol. 35(4), pages 638-677.
  • Handle: RePEc:oup:oxford:v:35:y:2019:i:4:p:638-677.
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    File URL: http://hdl.handle.net/10.1093/oxrep/grz021
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    More about this item

    Keywords

    production network; input–output; inefficiencies; policy; fiscal policy; industrial policy; finance; industrial organization;
    All these keywords.

    JEL classification:

    • E23 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Production
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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