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Firm Networks Trade and Growth

Objective

The general theme of this research is to introduce the notion of large-scale economic networks into the mainstream of economics, in particular in macroeconomics and international trade. Economic agents often do not have access to all the relevant information they may need: whom they know, whom they interact with represents a small fraction of all possible interactions. I model this limited set of interactions as a network: agents are nodes, and they only interact with other agents they have formed a link with. What is the shape of this network of linkages between agents, and how does it evolve? More importantly, what are the aggregate implications of the shape of this network? These are the broad questions I will address in this research. I will consider six specific applications of this unifying idea in various fields: international trade, IO, macroeconomics and growth. In international trade, we have only a very crude understanding of the frictions that prevent most firms from exporting. I propose to model trade frictions as a dynamic network: at a point in time, a given exporter only has information about a limited set of potential customers in a few foreign countries; over time, this exporter discovers new export opportunities, and its network of customers evolves dynamically. I offer theoretical and empirical tools to understand and analyze the properties of this network, and show how it shapes aggregate trade patterns. In IO and macroeconomics, most plants only have few suppliers. I will model the input-output linkages between plants as a dynamic network; I offer theoretical and empirical tools to analyze this network, and show how it shapes the propagation of plant level shocks to generate aggregate fluctuations. Human capital accumulation is key to economic growth and development, with workers learning from each other. I will model these growth-enhancing interactions as a dynamic network; I will show how the properties of this network shape long run growth.

Field of science

  • /social sciences/economics and business/economics/macroeconomics
  • /social sciences/economics and business/business and management/commerce

Call for proposal

ERC-2013-StG
See other projects for this call

Funding Scheme

ERC-SG - ERC Starting Grant

Host institution

FONDATION NATIONALE DES SCIENCES POLITIQUES
Address
Rue Saint Guillaume 27
75341 Paris Cedex 07
France
Activity type
Higher or Secondary Education Establishments
EU contribution
€ 643 392,36
Principal investigator
Thomas Chaney (Mr.)
Administrative Contact
Cathy Benard (Ms.)

Beneficiaries (2)

FONDATION NATIONALE DES SCIENCES POLITIQUES
France
EU contribution
€ 643 392,36
Address
Rue Saint Guillaume 27
75341 Paris Cedex 07
Activity type
Higher or Secondary Education Establishments
Principal investigator
Thomas Chaney (Mr.)
Administrative Contact
Cathy Benard (Ms.)
FONDATION JEAN JACQUES LAFFONT,TOULOUSE SCIENCES ECONOMIQUES

Participation ended

France
EU contribution
€ 526 007,64
Address
5E Etage, 1 Esp De L'universite
31080 Toulouse
Activity type
Research Organisations
Administrative Contact
Céline Claustre (Ms.)