Title: Oil shocks and production network structure: Evidence from the OECD
Authors: Petre Caraiani - Bucharest University of Economic Studies; Institute for Economic Forecasting (Romania) [presenting]
Abstract: Using a Bayesian time-varying VAR, the impact of oil shocks on GDP for a set of the OECD economies is derived. Various measures are further estimated to characterize the production network structure based on Input-Output matrices. When we analyze the relationship between the time-varying responses of GDP to oil demand and oil supply shocks and production network characteristics, we find that measures like skewness in the in-degrees and in the out-degrees or density tend to amplify the negative impact of oil shocks on GDP. The results are in line with the recent literature that outlines the importance of network structures for aggregate dynamics.