The Network Origins of Large Economic Downturns
Daron Acemoglu y Asuman Ozdaglarz Alireza Tahbaz-Salehix

Abstract
This paper shows that large economic downturns may result from the propagation of microeconomic
shocks over the input-output linkages across different firms or sectors within the
economy. Building on the framework of Acemoglu et al. (2012), we argue that the economy’s
input-output structure can fundamentally reshape the distribution of aggregate output, increasing
the likelihood of large downturns from infinitesimal to substantial. More specifically, we show
that an economy with non-trivial intersectoral input-output linkages that is subject to thin-tailed
productivity shocks may exhibit deep recessions as frequently as economies that are subject to
heavy-tailed shocks. Moreover, we show that in the presence of input-output linkages, aggregate
volatility is not necessarily a sufficient statistic for the likelihood of large downturns. Rather,
depending on the shape of the distribution of the idiosyncratic shocks, different features of the
economy’s input-output network may be of first-order importance. Finally, our results establish
that the effects of the economy’s input-output structure and the nature of the idiosyncratic
firm-level shocks on aggregate output are not separable, in the sense that the likelihood of large
economic downturns is determined by the interplay between the two.


大名鼎鼎的艾西莫格鲁的新作。Plus：this is a working paper.