Aggregate fluctuations from independent sectoral shocks: self-organized criticality in a model of production and inventory dynamics

The Double-Edged Sword of Global Integration: Robustness, Fragility & Contagion in the International Firm Network

“…12 Other papers exploring connectedness and transmission of shocks across sectors in the macroeconomy are Bak et al (1993), Carvalho and Gabaix (2013) and Gabaix (2011). 13 Acemoglu et al (2015a) developed a unified framework for studying network propagation and amplification of microeconomic shocks dependent on whether the system has (log) linear agent interaction and network utility functions.…”

From production networks to geographical economics

“…7, Delli Gatti et al 2005) • common endeavours (Powell et al 1996) • partial ownership (Kogut andWalker 2001, Battiston et al 2007a) • and of course economic transactions allowing production (Bak et al 1993, Battiston et al 2007b, and the present paper).…”

“…Our problematics is largely inspired from earlier efforts by Bak et al (1993), Stiglitz and Greenwald (2003) and Delli Gatti et al (2005), to determine the role of local random events on the distribution of production and wealth dynamics.…”

“…In Bak et al (1993) for instance, production networks are defined by edges that represent supplier/customer connections among firms engaged in batch production activity. The authors describe the distribution of production avalanches triggered by random independent demand events at the output boundary of the production network.…”

Optimization of order policies in supply networks

“…Each supplier receives payments for delivered items at a certain fixed set of prices and has to pay production costs at certain rates for each item produced. This setup is similar to the ones studied in [4], [5] and [7], where it is shown that the resulting dynamics can exhibit a quite complicated behavior. One of the key features of the model considered in this paper is the presence of limited production capacities.…”