Production and Financial Networks in Interplay: Crisis Evidence from Supplier-Customer and Credit Registers

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, January 16, 2024: Kenan Humeromivc from IMT School for Advanced Studies of Lucca will present the paper “Production and Financial Networks in Interplay: Crisis Evidence from Supplier-Customer and Credit Registers (with G. Jiménez, E. Moral-Benito, J-L. Peydró, F. Vega-Redondo)".

Abstract:

We show that bank credit shocks to firms propagate upstream and downstream along the production network, with stronger effects for upstream than downstream propagation. Our identification strategy relies on: (i) administrative datasets from Spain on supplier-customer transactions and bank loans; (ii) a standard operationalization of bank credit-supply shocks during the Global Financial Crisis; and (iii) a general equilibrium model of an interfirm production network economy with financial frictions that is structurally estimated. Our results indicate that the network propagation leads to a 50% increase in the aggregate effects of bank credit supply shocks on GDP growth, with equally important first-order versus higher-order network effects

The Seminar will be held in Aula 6.

For online partecipation use this link.