Purpose Networks and relationships are not stable. On the contrary, they change and are transformed by the actors who take part in them. Change and transformation result from the actions and reactions of these actors. However, a key issue is what makes the actors choose some actions and...

This paper shows that a production network facilitates expectations-driven business cycles. Through input-output linkages, changes in expected demand can cause business-cycle fluctuations and endogenous movements in the Solow residual. When inputs must be purchased one period in advance,...