10.17889/E111326
Atalay, Enghin
Replication data for: How Important Are Sectoral Shocks?
ICPSR Inter-university Consortium for Political and Social Research
2016
10.1257/mac.20160353
10.1257/mac.20160353
V0
I quantify the contribution of sectoral shocks to business cycle fluctuations in aggregate output. I develop and estimate a multi-industry general equilibrium model in which each industry employs the material and capital goods produced by other sectors. Using data on US industries' input prices and input choices, I find that the goods produced by different industries are complements to one another as inputs in downstream industries' production functions. These complementarities indicate that industry-specific shocks are substantially more important than previously thought, accounting for at least half of aggregate volatility.