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Essays on Macroeconomics and Capital Intermediation Networks

Chavez Calva, Jose Luis (2017) Essays on Macroeconomics and Capital Intermediation Networks. PhD thesis, University of Essex.

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Abstract

The topic of aggregate fluctuations in the economic activity is a long-standing question in the study of business cycles, not only the identification of sources of volatility is necessary to forecast the future pace of the economy, but also to understand how the variance of aggregate activity could be reduced. Regarding economic policy, the analysis of economics stability has taken more relevance in the aftermath of the recent financial crisis. The crisis highlighted the need to think of the economy as a complex network where an idiosyncratic shock may precede aggregate consequences, such as the recent problem in arising from the financial sector and its effect on the economy. Chapter 1 introduces a two-period multi-sector economy with Input-Output linkages and a banking sector. This model is useful to assess the relevance of the economic structure on aggregate volatility. The main finding is that single financial shocks to banks do not average out and could lead to aggregate fluctuations. In particular, aggregate volatility does not go in a single direction when we increase the number of links bank-to-sector (concentration), enhance the number of links shared by two or more banks (integration) or redistribute the links (diversification). In Chapter 2, I use a detailed benchmark data of the U.K. input-output accounts spanning from 1997 to 2010, I apply the model of intersectoral linkages by Acemoglu et al. (2012) to identify if the U.K. network structure is prone to the propagation of shocks. In Chapter 3, I present a model of a multi-sector input-output economy based on Long and Plosser (1983) and Acemoglu et al. (2012) to analyse the effects of capital risk sharing between firms, productivity shocks correlations between firms of the same ownership organisations, and collateral restrictions between firms of separate groups, on aggregate fluctuations.

Item Type: Thesis (PhD)
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HD Industries. Land use. Labor
H Social Sciences > HG Finance
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jose Chavez Calva
Date Deposited: 06 Apr 2017 16:16
Last Modified: 06 Apr 2017 16:16
URI: http://repository.essex.ac.uk/id/eprint/19440

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