We model a credit network characterized by credit relationships connecting (i) downstream (D) and upstream (U) firms and (ii) firms and banks. The net worth of D firms is the driver of fluctuations. The production of D firms and of their suppliers (U firms) in fact, is constrained by the...

In this paper we propose an interpretation of the current Global Financial Crisis which emphasizes sectoral dislocation following localized technical change in the presence of barriers to labor mobility. This tale is reminiscent of a similar tale concerning the Great Depression. In the 30s...

We model a network economy with three sectors: downstream firms, upstream firms, and banks. Agents are linked by productive and credit relationships so that the behavior of one agent influences the behavior of the others through network connections. Credit interlinkages among agents are a source...