The Impact of Node Addition and Deletion on Network Production Fluctuations
Fuente:
arXiv
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| Autore principale: | |
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| Natura: | Preprint |
| Pubblicazione: |
2025
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| _version_ | 1866908364757270528 |
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| author | Sefidi, Mahdi Kohan |
| author_facet | Sefidi, Mahdi Kohan |
| contents | Production networks, dynamic systems of firms linked through input-output relationships, transmit microeconomic shocks into macroeconomic fluctuations. While prior studies often assume static networks, real-world economies feature continuous firm entry (node addition) and exit (node deletion). We develop a probabilistic model to analyze how these dynamics affect production volatility and network resilience. Integrating Leontief input-output frameworks with controllability theory. By quantifying fluctuations as expected values under probabilistic node dynamics, we identify trade-offs between adaptability and stability. Methodologically, we unify Kalman rank criteria and minimum input theory, offering policymakers insights to balance innovation-driven entry with safeguards against destabilizing exits. |
| format | Preprint |
| id |
arxiv_https___arxiv_org_abs_2505_10154 |
| institution | arXiv |
| publishDate | 2025 |
| record_format | arxiv |
| spellingShingle | The Impact of Node Addition and Deletion on Network Production Fluctuations Sefidi, Mahdi Kohan Theoretical Economics Production networks, dynamic systems of firms linked through input-output relationships, transmit microeconomic shocks into macroeconomic fluctuations. While prior studies often assume static networks, real-world economies feature continuous firm entry (node addition) and exit (node deletion). We develop a probabilistic model to analyze how these dynamics affect production volatility and network resilience. Integrating Leontief input-output frameworks with controllability theory. By quantifying fluctuations as expected values under probabilistic node dynamics, we identify trade-offs between adaptability and stability. Methodologically, we unify Kalman rank criteria and minimum input theory, offering policymakers insights to balance innovation-driven entry with safeguards against destabilizing exits. |
| title | The Impact of Node Addition and Deletion on Network Production Fluctuations |
| topic | Theoretical Economics |
| url | https://arxiv.org/abs/2505.10154 |