Network structure of the economy and the propagation of monetary shocks

Deryugina Elena, Leonidov Andrey, Ponomarenko Alexey, Radionov Stanislav, Vasilyeva Ekaterina 

The study of the relationship between the network structure of the economy and the transmission of monetary shocks plays a significant role in modern economic literature. The paper examines various aspects of the propagation of monetary shocks, such as the dispersion of relative prices and the local peak values of the aggregated price index achieved during the convergence to the new equilibrium. Authors calibrate a network model and monetary shocks based on empirical data from input-output tables for the Russian economy. They show that these developments depend significantly on the way new money is injected into the economy.

Network structure of the economy and the propagation of monetary shocks