In a production network economy, time to build decreases the volatility generated by productivity shocks, while it increases the volatility generated by demand shocks. This happens because time to build changes the propagation mechanism of demand shocks: since quantities are pre-determined, demand shocks directly affect prices, a channel absent without time to build.
Time to build and dynamic diffusion in production networks / Bizzarri, M.. - (2025). [10.2139/ssrn.5495362]
Time to build and dynamic diffusion in production networks
Bizzarri M.
2025
Abstract
In a production network economy, time to build decreases the volatility generated by productivity shocks, while it increases the volatility generated by demand shocks. This happens because time to build changes the propagation mechanism of demand shocks: since quantities are pre-determined, demand shocks directly affect prices, a channel absent without time to build.File in questo prodotto:
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