English, Article edition: Cyclicality and Sectoral Linkages: Aggregate Fluctuations from Independent Sectoral Shocks Michael Horvath

User activity

Share to:
 
Bookmark: http://trove.nla.gov.au/version/57600
Physical Description
  • article
Language
  • English

Edition details

Title
  • Cyclicality and Sectoral Linkages: Aggregate Fluctuations from Independent Sectoral Shocks
Author
  • Michael Horvath
Physical Description
  • article
Notes
  • The traditional argument against the relevance of sector-specific shocks for the aggregate phenomenon of business cycles invokes the law of large numbers: positive shocks in some sectors are offset by negative shocks in other sectors. This paper hypothesizes that cancellation of sector-specific shocks via the law of large numbers is affected by interactions among producing sectors. The analysis is performed within the context of a multisector model similar in spirit to that of Long and Plosser (1983). It is shown that the rate at which the law of large numbers applies is controlled by the rate of increase in the number of full rows in the input-use matrix rather than by the rate of increases in the total number of sectors. Investigations of actual input-use matrices from the U.S. economy reveal that the number of full rows increases much slower than the total number of rows upon disaggregation and when these input-use matrices are used to parameterize the model, aggregate volatility from sector shocks declines at less than half the rate implied by the law of large numbers. This finding leaves open the possibility that a sizable portion of aggregate volatility is caused by "smaller" shocks to individual sectors. Simple statistics calculated from the model indicate that as much as 80% the volatility in U.S. gross domestic product growth rates could be the result of independent shocks to 2-digit Standard Industrial Code sectors. (Copyright: Elsevier)
  • RePEc:red:issued:v:1:y:1998:i:4:p:781-808
Language
  • English
Contributed by
OAIster

Get this edition

Other links

  • Set up My libraries

    How do I set up "My libraries"?

    In order to set up a list of libraries that you have access to, you must first login or sign up. Then set up a personal list of libraries from your profile page by clicking on your user name at the top right of any screen.

  • All (1)
  • Unknown (1)
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.
None of your libraries hold this item.

User activity


e.g. test cricket, Perth (WA), "Parkes, Henry"

Separate different tags with a comma. To include a comma in your tag, surround the tag with double quotes.

Be the first to add a tag for this edition

Be the first to add this to a list

Comments and reviews

What are comments? Add a comment

No user comments or reviews for this version

Add a comment