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Natural and anthropogenic disasters frequently affect both the supply and demand sides of an economy. A striking recent example is the Covid-19 pandemic which has created severe disruptions to economic output in most countries. These direct shocks to supply and demand will propagate downstream and upstream through production networks. Given the exogenous shocks, we derive a lower bound on total shock propagation. We find that even in this best case scenario network effects substantially amplify the initial shocks. To obtain more realistic model predictions, we study the propagation of shocks bottom-up by imposing different rationing rules on industries if they are not able to satisfy incoming demand. Our results show that economic impacts depend strongly on the emergence of input bottlenecks, making the rationing assumption a key variable in predicting adverse economic impacts. We further establish that the magnitude of initial shocks and network density heavily influence model predictions. [ABSTRACT FROM AUTHOR]

R&D spillovers are unanimously considered as one of the main driving forces of technical change, innovation and economic growth. This paper aims at measuring interindustry R&D spillovers. We apply an 'uncertainty-sensitivity analysis' to the Italian input-output table of intermediate goods split into 31 economic sectors for the year 2000. The value added of using this methodology is the opportunity of distinguishing between spillover effects induced by productive linkages (the Leontief forward multipliers) and those activated by R&D investments, capturing the uncertain and non-linear nature of the relations between spillovers and factors affecting them. [ABSTRACT FROM AUTHOR]

Ragnar Frisch claimed on various occasions that he had invented the principles of input–output analysis. Frisch and Leontief worked simultaneously on their respective contributions but within different contexts. Frisch's contribution was an attempt to cope with market collapse of the depression and thus arose from a different motivation than Leontief's equilibrium analysis. Although prominently published in Econometrica in 1934, Frisch's ‘circulation planning’ has not been much discussed in the literature. The paper sets out the analytic core of Frisch's contribution and its formal similarity with Wassily Leontief's input–output analysis, which was the basis for Frisch's claim. It examines the inventiveness and analytical power of Frisch's approach and relates it to other works by him. [ABSTRACT FROM AUTHOR]

Sensitivity analysis has become an important tool to test the robustness of estimated economic models. In this paper we propose the use of simulation-based sensitivity analysis to identify the fundamental structure of the economy. To show the possibilities of this technique, we provide empirical evidence on the path of structural change occurring in the Chicago economy by running simulations for projected input–output tables over the period 1975–2010. [ABSTRACT FROM AUTHOR]