International production networks and the propagation of financial shocks

IF 3.8 1区 经济学 Q1 ECONOMICS
Sihao Chen
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引用次数: 0

Abstract

This paper investigates how external sector-level financial shocks are transmitted to a small open economy through international production networks. Using a multi-sector small open economy model, I show analytically that a financial shock to an external production sector affects downstream sectors (through a price effect) and upstream sectors (through a direct demand effect and a complementarity or substitution effect). These effects work through international production networks, affecting the small country’s output and GDP. Quantitatively, I construct U.S. sector-level excess bond premia and estimate key parameters for simulations. The simulation exercises show that U.S. financial shocks account for a significant proportion of the fluctuations in Mexico’s GDP during the global financial crisis. International production networks amplify the real effect of external financial shocks by a factor of at least three during the crisis.
国际生产网络和金融冲击的传播
本文研究了外部部门层面的金融冲击是如何通过国际生产网络传导到一个小型开放经济体的。使用多部门小型开放经济模型,我分析地表明,对外部生产部门的金融冲击影响下游部门(通过价格效应)和上游部门(通过直接需求效应和互补或替代效应)。这些影响通过国际生产网络发挥作用,影响小国的产出和国内生产总值。在定量上,我构建了美国部门级超额债券溢价,并估计了模拟的关键参数。模拟演习表明,在全球金融危机期间,美国的金融冲击在墨西哥国内生产总值波动中占很大比例。在危机期间,国际生产网络将外部金融冲击的实际影响放大了至少三倍。
本文章由计算机程序翻译,如有差异,请以英文原文为准。
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来源期刊
CiteScore
5.80
自引率
6.10%
发文量
98
期刊介绍: The Journal of International Economics is intended to serve as the primary outlet for theoretical and empirical research in all areas of international economics. These include, but are not limited to the following: trade patterns, commercial policy; international institutions; exchange rates; open economy macroeconomics; international finance; international factor mobility. The Journal especially encourages the submission of articles which are empirical in nature, or deal with issues of open economy macroeconomics and international finance. Theoretical work submitted to the Journal should be original in its motivation or modelling structure. Empirical analysis should be based on a theoretical framework, and should be capable of replication.
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