We study a new model to study the effect of contract externalities that arise through shock transmission. We model a … financial network where good firms enjoy direct and indirect benefits from linking with one another. Bad risks benefit from …

This paper investigates how economic shocks propagate and amplify through the input-output network connecting … impact of economic shocks strongly depends on the nature of the shock and country size. Shocks that impact on final demand … this case, we also find that: (i) the more a sector is globally central in the country network, the largest its impact; (ii …

networks in the spatial diffusion of local economic shocks. We develop a network model that shows how a district's level of … prosperity is related to its position in the network. The network model's first-order conditions are used to derive an … underlying network structure can inform us about the potential gains from policies that increase economic activity in specific …

builds China's production network on both industry level and firm level. We describe the characteristics of such network … using various network indexes and obtain the following results: first, China's production network on industry level is … influence of sectoral shocks on macro fluctuations increasingly important. Second, China's production network on firm level has …

efficient network maximizing social welfare, and find that the efficient graph is either empty, complete or shows a strong core … counterfactual analyses, taking into account that the network and production can dynamically adjust to shocks or policy interventions ….6%. Our study further reveals that when ignoring the network structure the impact of firm exit or mergers is significantly …

We study network formation with n players and link cost α > 0. After the network is built, an adversary randomly …