One of the characteristic features of our modern economy is interdependence between firms (Lamy 2013). Firms purchase and sell goods simultaneously and these customer-supplier relationships generate a huge and complex network, through which individual shocks can propagate across the economy. For example, since transactions between firms are frequently performed on trade credit, the bankruptcy of a customer may worsen the financial conditions of its suppliers and in turn lead to another bankruptcy of its suppliers. In essence, the bankruptcy of a few firms may trigger a large-scale bankruptcy propagation involving many firms. If so, how large is bankruptcy propagation empirically observed in an economy? What is the risk of a large-scale bankruptcy propagation?
To read the full text
https://www.rieti.go.jp/en/columns/v01_0113.html
"Raising Productivity: UK economic statistics review and EBPM"
By SENGA Tatsuro (Fellow, RIETI)
https://www.rieti.go.jp/en/columns/a01_0514.html
"Japan and U.S. Starting Trade Negotiations: Japan in a difficult position regarding cars and foreign exchange"
by ISHIKAWA Jota (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/ishikawa/07.html
"Challenges for New Governments in Latin America: The relationship with the Congress in Brazil will be a key"
by HAMAGUCHI Nobuaki (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/hamaguchi/05.html
"Future Design: A new policymaking system for future generations"
by KOBAYASHI Keiichiro (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/columns/s19_0011.html
"How Should We Measure the Development of Artificial Intelligence Technology?"
by IKEUCHI Kenta (Fellow, RIETI)
https://www.rieti.go.jp/en/columns/a01_0509.html
"What are the Risks for the Global Economy?"
by ITO Hiroyuki (Visiting Fellow, RIETI)
https://www.rieti.go.jp/en/special/policy-update/075.html
"Foreign Workers: Can They Be the Saviors of Japan?"
by KONDO Keisuke (Fellow, RIETI)
https://www.rieti.go.jp/en/columns/s19_0006.html
"Policy Objectives Set at the Beginning of the Heisei Era and Reality"
by MORIKAWA Masayuki (Vice President, RIETI)
https://www.rieti.go.jp/en/columns/s19_0001.html
"Latent Risks in the Strong Economy—Poor Resistance in Response to Crises from Overseas"
by MIYAGAWA Tsutomu (Faculty Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/miyagawa/13.html
"Ordinary people have been hurt by globalism"
by Willem THORBECKE (Senior Fellow, RIETI)
https://www.rieti.go.jp/en/papers/contribution/willem-thorbecke/06.html
Fellow titles and links in the text are as of the date of publication.
For questions or comments regarding RIETI Report, please contact the editor.
*If the "Send by mailer" button does not work, please copy the address into your email "send to" field and connect the prefix and the suffix of the address with an "@", sending it normally.
RIETI Report is published bi-weekly.