“Propagation of Economic Shocks in Input-Output Networks” with M. Contreras

The recent economic crisis propagated quickly through various channels around the world. In this webinar Prof. Martha G. Alatriste Contreras presents her work on shock propagation through the input- output network which connect industrial sectors in developed economies. She presents alternative models of diffusion on networks and calibrate them using input-output data on real-world inter-sectoral dependencies for several European countries before the Great Depression. The results are intriguing: the impact of economic shocks strongly depends on the nature of the shock and country size. In particular, shocks that impact on final demand without changing production and the technological relationships between sectors have on average a large but very homogeneous impact on the economy. Conversely, when shocks change also the magnitudes of input-output across-sector interdependencies (and possibly sector production), the economy is subject to predominantly large but more heterogeneous avalanche sizes. Moreover, the centrality of an industry in the country network and the size of the country matters for shock propagation.

Martha G. Alatriste Contreras is Associate Professor in Economics at the Faculty of Economics, National Autonomous University of Mexico. She received her PhD. from GREQAM- Aix-Marseille University (Aix-Marseille School of Economics), CNRS , EHESS (France) in 2014 and an MA degree from the Paris School of Economics. Her research interests and scientific work focuses on complexity economics, computational economics, networks, industrial structure and structural change as well as input-output analysis, industrial policy, diffusion of shocks and quantitative methods in general. Alatriste Contreras published her work in several international journals such as "Physical Review E" and the "Journal of Economic Structures". Moreover, she is referee for journals including "Journal of Economic Interaction" and "Coordination, Economic Systems Research".