In a broad class of macroeconomic models with production networks, it is difficult to discern which set of structural relationships between sectors amplify shocks and shape aggregate outcomes. As a remedy, we provide a formula that sidesteps this issue by considering linkages in isolation,...

This paper studies the role of supply base diversification on the propagation of shocks through production networks. We identify exogenous shocks with the occurrence of natural disasters in the US between 1978 and 2017. We find that affected suppliers reduce customers’ sales growth by ≈25%,...

We decompose the macroeconomic impact of Covid-19 in the US using three production network measures. First, we estimate the aggregate indirect effect of sectoral employment shocks, finding these "network spillovers" account for approximately 72% of the decline in real GDP over the second quarter...

We propose a measure of industries’ direct and indirect exposure to microeconomic TFP shocks that originate from any sector of the economy. We show that sectors that rely heavily on intermediate inputs from other industries are more vulnerable to such shocks. In a sample of 43 countries, we...

We decompose the macroeconomic impact of Covid-19 in the US using three production network measures. First, we estimate the aggregate indirect effect of sectoral employment shocks, finding these “network spillovers” to account for ≈72% of the decline in real GDP over the second quarter of...

We present a new measure of producers’ aggregate importance in a production economy with input-output linkages. Unlike existing measures, which capture the impact of an isolated TFP shock to a sector on aggregate output, we quantify how a sector amplifies simultaneous shocks to all producers...