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The Spreading of Shocks in the North America Production Network and Its Relation to the Properties of the Network

Author

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  • Martha G. Alatriste-Contreras

    (Facultad de Economía, Universidad Nacional Autónoma de México, Ciudad de México 04510, Mexico)

  • Martín Puchet Anyul

    (Facultad de Economía, Universidad Nacional Autónoma de México, Ciudad de México 04510, Mexico)

Abstract

We evaluate the short-run effect of a shock in the manufacturing sector in the North America Production Network. We use input–output data for Canada, Mexico, the USA, and the North America region. With this data we represent the economies as networks and apply a network diffusion model and execute computer simulations according to different escenarios. We then study the relation between the effects of the shock and the structure of the networks by computing structural properties of sectors. Results show the limited effects of a shock on the manufacturing sector, and thus shed light on the heterogeneous impacts of the trade agreement of the region. They provide useful information to design an industrial policy focused on the development of the production network. In particular, we focus on recommendations for the Mexican economy.

Suggested Citation

  • Martha G. Alatriste-Contreras & Martín Puchet Anyul, 2021. "The Spreading of Shocks in the North America Production Network and Its Relation to the Properties of the Network," Mathematics, MDPI, vol. 9(21), pages 1-19, November.
    • Handle: RePEc:gam:jmathe:v:9:y:2021:i:21:p:2795-:d:671925
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    References listed on IDEAS

    as
    1. Martha G. Alatriste Contreras & Giorgio Fagiolo, 2014. "Propagation of economic shocks in input-output networks: A cross-country analysis," Post-Print hal-01474258, HAL.
    2. John H. Miller & Scott E. Page, 2007. "Social Science in Between, from Complex Adaptive Systems: An Introduction to Computational Models of Social Life," Introductory Chapters, in: Complex Adaptive Systems: An Introduction to Computational Models of Social Life, Princeton University Press.
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    4. Theodore Tsekeris, 2017. "Network analysis of inter-sectoral relationships and key sectors in the Greek economy," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 12(2), pages 413-435, July.
    5. McNerney, James & Fath, Brian D. & Silverberg, Gerald, 2013. "Network structure of inter-industry flows," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 392(24), pages 6427-6441.
    6. Gerardo Fujii-Gambero & Rosario Cervantes-Martínez, 2017. "The weak linkages between processing exports and the internal economy. The Mexican case," Economic Systems Research, Taylor & Francis Journals, vol. 29(4), pages 528-540, October.
    7. John H. Miller & Scott E. Page, 2007. "Complexity in Social Worlds, from Complex Adaptive Systems: An Introduction to Computational Models of Social Life," Introductory Chapters, in: Complex Adaptive Systems: An Introduction to Computational Models of Social Life, Princeton University Press.
    8. Martha Alatriste-Contreras, 2015. "The relationship between the key sectors in the european union economy and the intra-European Union trade," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 4(1), pages 1-24, December.
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