Date: January 8 – 10, 2024

Instructor:  Dr. Christian Diem

Topics:

• Basics of network science
• Supply- and production networks
• Modelling shock propagation and systemic risk in supply and production networks

Description:

The COVID-19 crisis has put the spotlight on supply chains and the vast economic costs of shocks propagating along them. COVID-19 and other crises showed that economic modelling is often not up to the challenge of predicting how such crises affect country’s production networks. This seminar gives an overview, of the interdisciplinary field of supply- and production networks and how shock propagation and systemic risks on such networks can be modelled. We will touch on various academic disciplines contributing to the field (network and complexity science, economics and supply chain management), the data available for modelling these networks, and current approaches for estimating the indirect economic effects of crises, shock propagation and measuring economic systemic risk.

No particular prior knowledge is required, but a good understanding of linear algebra and programming skills are recommended. If you want to work hands on the mini-projects on Day 3 please install the R package (link will be provided in advance).

This course is open for advanced masters students and PhD candidates. If you would like to participate, please send a short email describing your motivation, together with your CV to xanthi.tsoukli(at)uni-bamberg.de before 20.12.2023. You will be notified of your acceptance by 22.12.2023. 

About the instructor:

Christian Diem is a Senior Scientist in the Network Economics, Supply Chains & Financial Markets Group at the Complexity Science Hub Vienna. In his research, Christian aims to better understand economic and financial systems with tools from economics, network science, and agent-based computer simulations. His focus lies on systemic risks and the propagation of economic shocks in supply networks and financial networks. Christian’s work ranges from optimally rewiring interbank networks to reduce systemic risk, quantifying systemic risk in large-scale firm-level supply networks, reconstructing the Austrian food supply chain network, and extending financial stress testing to include supply chain effects. He is one of the main organizers of a new workshop series focusing on firm-level supply networks (https://firmnets2022.csh.ac.at). He contributed to projects funded by the Austrian National Bank (OeNB), the Austrian Research Promotion Agency (FFG), and the Vienna Science and Technology Fund (WWTF). Christian holds a master’s degree in Quantitative Finance and a PhD in Economics and Social Sciences both from the Vienna University of Economics and Business.

Schedule:

Day 1, 08.01.2024

10:00 – 11:30: Refresher on networks

13:15 – 14:45: Supply chains, supply networks, or production networks? An overview

15:30 – 17:00: Shock propagation and systemic risk in economic networks incl. coding application

Day 2, 09.01.2024

10:00 – 11:30: Comparing shock propagation models from the Leontief inverse to simulation models

13:15 – 14:45: Measuring systemic risk in supply networks: The economic systemic risk index (ESRI)

15:30 – 17:00: Hands on tutorial using the ESRI R package and introducing mini projects

Day 3, 10.01.2024

Time for working on mini projects

15:30 – 17:00: Participants present their mini project findings

References:

• Pichler, A., Diem, C., Brintrup, A., Lafond, F., Magerman, G., Buiten, G., ... & Thurner, S. (2023). Building an alliance to map global supply networks. Science, 382(6668), 270-272.
• Hallegatte, S. (2008). An adaptive regional input‐output model and its application to the assessment of the economic cost of Katrina. Risk Analysis: An International Journal, 28(3), 779-799.
• Carvalho, V. M., & Tahbaz-Salehi, A. (2019). Production networks: A primer. Annual Review of Economics, 11, 635-663.
• Pichler, A., Pangallo, M., del Rio-Chanona, R. M., Lafond, F., & Farmer, J. D. (2022). Forecasting the propagation of pandemic shocks with a dynamic input-output model. Journal of Economic Dynamics and Control, 144, 104527.
• Diem, C., Borsos, A., Reisch, T., Kertész, J., & Thurner, S. (2022). Quantifying firm-level economic systemic risk from nation-wide supply networks. Scientific reports, 12(1), 7719.
• Battiston, S., Puliga, M., Kaushik, R., Tasca, P., & Caldarelli, G. (2012). Debtrank: Too central to fail? financial networks, the fed and systemic risk. Scientific reports, 2(1), 541.
• Thurner, S., Hanel, R., & Klimek, P. (2018). Introduction to the theory of complex systems. Oxford University Press.