Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/267559 
Year of Publication: 
2018
Citation: 
[Journal:] Baltic Journal of Economics [ISSN:] 2334-4385 [Volume:] 18 [Issue:] 2 [Publisher:] Taylor & Francis [Place:] London [Year:] 2018 [Pages:] 95-117
Publisher: 
Taylor & Francis, London
Abstract: 
Do input-output linkages of intermediate products affect the spread of sectoral shocks at the aggregate level in Lithuania, a small and open economy? What role does openness play in the empirical exercise? We answer these questions by: (i) constructing the Lithuanian input-output transactions tables with domestic-only and domestic and imported sector-by-sector direct requirements, and (ii) applying Acemoglu, Carvalho, Ozdaglar, and Tahbaz-Salehis [(2012). The network origins of aggregate fluctuations. Econometrica, 80(5), 1977-2016] network-based methodology and Gabaix and Ibragimov's [(2011). Rank-1/2: A simple way to improve the ols estimation of tail exponents. Journal of Business & Economic Statistics, 29(1), 24-39] modified log rank-log size regression. Our results indicate that the structure of input-output linkages cause aggregate economic volatility to decay at a rate lower than the established theoretical prediction. Indirect linkages play an equally important role for both domestic-only and aggregated domestic and import transactions.
Subjects: 
Input-output network
aggregate volatility
small-open economy
complexity economics
JEL: 
C13
C46
C67
E00
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by Logo
Document Type: 
Article

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