Growth Through Creation and Destruction of Supply Chains

Abstract

We study the consequences of supply link formation and destruction at both the microeconomic and macroeconomic level. At the microeconomic level, we show, using detailed Belgian data, that exits by upstream firms raise their downstream buyer’s price, and show that our estimates can be used to directly calibrate the microeconomic value of innovation in both expanding variety and Schumpeterian growth models. In expanding variety models, this is the “love-of-variety” and in Schumpeterian models this is the innovation “step-size.” At the macroeconomic level, we develop a framework for computing how churn in supply chains, driven by either creative destruction or expanding varieties, propagates through input-output connections to affect measured aggregate growth. At both the microeconomic and macroeconomic level, we find that the creation and destruction of supply linkages between firms have very strong effects.

Datum und Uhrzeit: 
Dienstag 13 September 2022, 16:30 - 18:00
Organisation: 
NBB, KU Leuven, UAntwerpen, UCLouvain, UGent, UHasselt, ULB, ULiège and UMons
Redner: 
David Baqaee (UCLA)
Ort: 
Auditorium of the National Bank of Belgium (Room A1)
Eintritt: 
gratis