WHAT ARE THE EFFECTS OF SUPPLY CHAIN SHOCK PROPAGATION ON FINANCIAL STABILITY DURING CRISES?

Major crises hit certain economic sectors and regions particularly hard and cause extreme supply chains. This is accompanied by negative effects on financial market stability. In order to better estimate the economic damage of future crises, we are developing a new stress testing method that takes into account the spread of immediate real economic damage along supply chains at the firm level. To this end, we are developing algorithms to simulate the joint propagation of real and financial economic shocks – on a newly developed multi-layer network.

For further information, please contact: meier@csh.ac.at.

Project Team

Preprints

Tabachová, Z., Diem, C., Borsos, A., Burger, C., & Thurner, S. (2023). Estimating the impact of supply chain network contagion on financial stability. arXiv preprint arXiv:2305.04865.

Diem, C., Borsos, A., Reisch, T., Kertész, J., & Thurner, S. (2023). Estimating the loss of economic predictability from aggregating firm-level production networks. arXiv preprint arXiv:2302.11451.

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