COMPUTATIONAL SOCIAL SCIENCE – Endogenous Growth in Production Networks – Antoine Mandel

March 24, 2017 @ 3:00 pm – 4:30 pm
Center for Social Complexity Suite 3rd Floor
Research Hall
Fairfax Campus
Karen Underwood

Antoine Mandel, Associate Professor
CES-Centre d’Economie de la Sorbonne
Endogenous Growth in Production Networks
Friday, March 24,2017, 3:00-4:30 p.m.
Center for Social Complexity Suite
Research Hall, 3rd Floor
We investigate the interplay between technological change and macroeconomic dynamics in an agent-based model of the formation of production networks. On the one hand, production networks form the structure that determines economic dynamics in the short run. On the other hand, their evolution reflects the long-term impacts of competition and innovation on the economy. We account for process innovation via increasing variety in the input mix and hence increasing connectivity in the net- work. In turn, product innovation induces a direct growth of the firm’s productivity and the potential destruction of links. The interplay between both processes generate complex technological dynamics in which phases of process and product innovation successively dominate. The model reproduces a wealth of stylized facts about industrial dynamics and technological progress, in particular the persistence of heterogeneity among firms and Wright’s law for the growth of productivity within a technological paradigm. We illustrate the potential of the model for the analysis of industrial policy via a preliminary set of policy experiments in which we investigate the impact on innovators’ success of feed-in tariffs and of priority market access.