Research

(Abstract). Modern economies are organized as dense production networks, yet comovement is conventionally understood through observed Input-Output linkages and vertical cascade effects. This paper argues that this view is incomplete. Comovement fundamentally depends on horizontal complementarities: the extent to which sectors share upstream suppliers or downstream buyers. Such network similarities in demand and supply induce simultaneous responses to idiosyncratic shocks, shaping the sign of comovement. Regarding aggregate fluctuations, horizontal transmission generates systematic correlations that prevent shocks from averaging out, even without cascading amplification. The framework developed highlights this novel diffusion channel as a complement to vertical propagation, offering a unified view of comovement rooted in the horizontal geometry of common economic interactions rather than network trade intensities. Using Input-Output data, I show that sectoral employment responses vary systematically with horizontal distances, with nearby sectors exhibiting dampened or opposing responses, and distant ones comoving positively.

JEL: C67, D57, E32, J21

KEYWORDS: production networks, Input-Output economy, horizontal transmission, network distance, sectoral comovement, aggregate fluctuations

(Abstract). This paper examines the determinants of U.S. wage inequality between industries. It distinguishes two channels of Skill-Biased Technological Change: a quantity effect, mirroring variations in the distribution of capital and labour inputs, and a structural effect, reflecting differences in substitution elasticities across factors of production. Counterfactual exercises show that evolving technological heterogeneity in substitution patterns dominates wage dispersion. A quantitative decomposition reveals that structural forces, mostly reflecting substitutability of routine with non-routine labour, account for 94% of observed wage variance, exacerbated by stronger sorting and segregation effects. Upon neutralising structural differences, the quantity channel reckons merely 6-15%. Indeed, structural heterogeneity, rather than mere changes in factor quantities, is the dominant force behind U.S. wage inequality.

JEL: E24, J31, J82, L16

KEYWORDS: wage inequality, technological change, labour force composition, elasticity of substitution

(Abstract). Over the past decades, the slope of the Phillips Curve has exhibited substantial variation across countries and sectors, with a marked flattening prior to the pandemic. This paper studies how the topology of domestic and global production networks shapes inflation dynamics. Using country-industry data on producer prices and output, we document systematic heterogeneity in Phillips-curve slopes: downstream sectors and industries with strong backward integration display flatter inflation responses, while upstream sectors and industries with strong forward linkages exhibit steeper dynamics. We rationalize these asymmetries with a network-based DSGE model where the NKPC slope reflects the interaction between real rigidities (strategic complementarities and endogenous markups), network propagation of nominal rigidities, and global slack transmission through imported intermediates. The results imply that the aggregate Phillips Curve slope is an endogenous object that shifts with production network structure and global integration.

JEL: E32, E52, F41

KEYWORDS: monetary policy, production networks, Global Value Chains, Phillips Curve, real rigidities, price stickiness, strategic complementarities