Propagation of shocks in an input-output economy: Evidence from disaggregated prices

• 成果类型: Article
• 署名作者: Luo, Shaowen; Villar, Daniel
• 署名单位: Virginia Polytechnic Institute & State University; Federal Reserve System - USA; Federal Reserve System Board of Governors
• 刊物名称: JOURNAL OF MONETARY ECONOMICS
• ISSN/ISSBN: 0304-3932
• DOI: 10.1016/j.jmoneco.2023.05.004
• 发表日期: 2023
• 页码: 26-46
• 关键词: Nominal rigidity; Production network; Propagation of shocks; inflation; pandemic

摘要

Using disaggregated industry-level data, this paper empirically evaluates predictions for the cross-sectional price change distribution made by input-output models with sticky prices. The response of prices to shocks is found to be consistent with the price sen-sitivities predicted by the input-output model. Moreover, moments of the sectoral price change distribution vary over time in response to the evolution of the network structure. Finally, through a quantitative analysis, demand and supply shocks are disentangled during the pandemic period. Counterfactual analyses show that sectoral supply shocks, aggregate demand shocks and the production network structure contributed significantly to the in-flation surge in 2021-2022.& COPY; 2023 Elsevier B.V. All rights reserved.