Acemoglu, Daron; Carvalho, Vasco; Ozdaglar, Asuman; Tahbaz-Salehi, Alireza
(Cambridge, MA: Department of Economics, Massachusetts Institute of Technology, 2011-10-20)
This paper argues that in the presence of intersectoral input-output linkages, microeconomic idiosyncratic shocks may lead to aggregate fluctuations. In particular, it shows that, as the economy becomes more disaggregated, ...