Production Networks: A Primer

Carvalho, V. M. and Tahbaz-Salehi, A.

This article reviews the literature on production networks in macroeconomics. It presents the theoretical foundations for the role of input–output linkages as a shock propagation channel and as a mechanism for transforming microeconomic shocks into macroeconomic fluctuations. The article also provides a brief guide to the growing literature that explores these themes empirically and quantitatively.