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Production Networks and Economic Policy

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  • Grassi, Basile
  • Sauvagnat, Julien

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.

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  • Grassi, Basile & Sauvagnat, Julien, 2019. "Production Networks and Economic Policy," CEPR Discussion Papers 13953, C.E.P.R. Discussion Papers.
  • Handle: RePEc:cpr:ceprdp:13953
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    2. Ernest Liu & Aleh Tsyvinski, 2021. "Dynamical Structure and Spectral Properties of Input-Output Networks," Working Papers 2021-13, Princeton University. Economics Department..
    3. Ferreira, Pedro Cavalcanti & Delalibera, Bruno Ricardo & Gomes, Diego Braz Pereira & Soares, Johann Rodrigues de Souza, 2022. "Tax reforms and network effects," FGV EPGE Economics Working Papers (Ensaios Economicos da EPGE) 830, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil).

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    More about this item

    Keywords

    Finance; Fiscal policy; Industrial Organisation; industrial policy; inefficiencies; Input-Output; policy; Production Network;
    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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