Exploiting the exogenous and regional nature of the Great East Japan Earthquake of 2011, this paper provides a quantification of the role of input-output linkages as a mechanism for the propagation and amplification of shocks. We document that the disruption caused by the disaster propagated...

This paper quantifies the spillover effect of local exogenous shocks, such as earthquakes, to other firms through supply chain networks. Combining micro data on a large-scale inter-firm transaction network and geographic information on firm location, we examine the firm level impact of supply...

This paper argues that in the presence of intersectoral input-output linkages, microeconomic idiosyncratic shocks may lead to aggregate fluctuations. In particular, it shows that, as the economy becomes more disaggregated, the rate at which aggregate volatility decays is determined by the...