Non disponibile in italiano
Javier Quintana
- 6 July 2026
- OCCASIONAL PAPER SERIES - No. 392Details
- Abstract
- The repeated occurrence of supply-chain disruptions since the COVID-19 pandemic reveals the need to complement traditional macroeconomic frameworks with approaches that better capture the complexity of modern economic productionstructures. This paper synthesises the findings of the ChaMP Research Network, highlighting how production network models and heterogeneity across firms, sectors and countries enrich our understanding of monetary policy transmission. Bycapturing input-output relationships between firms and economic sectors, these approaches show how the propagation and persistence of shocks depend on network structure, the position of sectors within the network – where central sectorsexert disproportionate influence – and differences and variations in price and wage flexibility. The inflationary effects of supply shocks tend to be amplified, while the effects of demand shocks, including monetary policy shocks, are dampened. Inaddition, large shocks can give rise to nonlinearities, such as a steepening of the Phillips curve. This aligns with the conclusions of the ECB’s most recent strategy assessment, which emphasise the need to analyse the risks surrounding the inflationoutlook. The findings also point to the emergence of trade-offs between inflation and output gap stabilisation, as production networks and heterogeneity weaken the alignment between price and output dynamics. As a result, stabilising inflation andoutput simultaneously calls for astute fiscal policy. Overall, incorporating production networks provides a more nuanced and policy-relevant framework for designing state-contingent and data-informed monetary policy.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
D57 : Microeconomics→General Equilibrium and Disequilibrium→Input?Output Tables and Analysis
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
- 7 February 2025
- WORKING PAPER SERIES - No. 3020Details
- Abstract
- An increase of e100 per tonne in the EU carbon price reduces the carbon footprint but lowers GDP due to higher energy costs and carbon leakage. Using a dynamic multi-sector, multi-country model augmented with an energy block that includes endogenous renewable energy investment, we analyze the macroeconomic and emissions effects of a carbon price. Investment in renewable energy mitigates electricity price increases in the medium term, leading to a smaller GDP loss (up to -0.4%) and a larger emissions reduction (24%) in the EU. Neglecting renewable energy investment overestimates the negative economic impact. We also find that a Carbon Border Adjustment Mechanism (CBAM) reduces carbon leakage but slightly hurts GDP and inflation as the competitive gain is offset by the higher costs of imported intermediate inputs.
- JEL Code
- C6 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling
H2 : Public Economics→Taxation, Subsidies, and Revenue
Q5 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics
- 19 December 2024
- OCCASIONAL PAPER SERIES - No. 365Details
- Abstract
- In light of recent global economic and geopolitical shocks threatening trade openness, this report aims to shed light on geoeconomic fragmentation and develops a rich set of new tools to assess its economic effects and implications for central banks. The report shows that, although global trade integration has largely withstood recent disruptions and the rise of inward-looking policies, selective decoupling between few trading partners (United States vis-à-vis China, western economies vis-à-vis Russia) and for specific products (such as advanced technologies) is occurring. Survey data show that, although European firms are reorganising supply chains critical foreign dependencies persist. A firm-level stress test reveals that sudden disruptions in the supply of critical inputs from high-risk countries would lead to significant, albeit very heterogeneous, economic losses across firms, regions and sectors. Addressing foreign dependencies with broad-based protectionism policies, however, is self-defeating. In an extreme counterfactual scenario involving prohibitive and across-the-board trade barriers between geopolitical blocs, global GDP could decline by up to 9% coupled with an increase in global inflation of 4 percentage points in the first year, with the impact persisting for at least five years. It is conceivable that trade fragmentation will unravel over the course of a number of years, with supply disruptions becoming more frequent and severe than in the past. If this process should ultimately lead to a less interconnected global economy, countries might suffer from increased volatility and price pressures, as shocks cannot be easily diversified away through trade. [...]
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F14 : International Economics→Trade→Empirical Studies of Trade
F51 : International Economics→International Relations, National Security, and International Political Economy→International Conflicts, Negotiations, Sanctions
F52 : International Economics→International Relations, National Security, and International Political Economy→National Security, Economic Nationalism
F61 : International Economics→Economic Impacts of Globalization→Microeconomic Impacts
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General