Fragility of a multilayer network of intranational supply chains
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Applied Network Science
RESEARCH
Open Access
Fragility of a multilayer network of intranational supply chains Michael Gomez1, Susana Garcia1,2, Sarah Rajtmajer3,4, Caitlin Grady1,4 and Alfonso Mejia1* * Correspondence: [email protected] 1 Department of Civil and Environmental Engineering, The Pennsylvania State University, State College, USA Full list of author information is available at the end of the article
Abstract Supply chains enable the flow of goods and services within economic systems. When mapped for the entire economy and geographic locations of a country, supply chains form a spatial web of interactions among suppliers and buyers. One way to characterize supply chains is through multiregional input-output linkages. Using a multiregional input-output dataset, we build the multilayer network of supply chains in the United States. Together with a network cascade model, the multilayer network is used to explore the propagation of economic shocks along intranational supply chains. We find that the effect of economic shocks, measured using the avalanche size or total number of collapsed nodes, varies widely depending on the geographic location and economic sector of origin of a shock. The response of the supply chains to shocks reveals a threshold-like behavior. Below a certain failure or fragility level, the avalanche size increases relatively quickly for any node in the network. Based on this result, we find that the most fragile regions tend to be located in the central United States, which are regions that tend to specialize in food production and manufacturing. The most fragile layers are chemical and pharmaceutical products, services and food-related products, which are all sectors that have been disrupted by the Coronavirus Disease 2019 (COVID-19) pandemic in the United States. The fragility risk, measured by the intersection of the fragility level of a node and its exposure to shocks, varies across regions and sectors. This suggests that interventions aiming to make the supply-chain network more robust to shocks are likely needed at multiple levels of network aggregation. Keywords: Economic networks, COVID-19, Shock, Cascading failure, Multiplex, Diffusion, Multiregional input-output
Introduction In economic systems, a shock that originates in a single economic sector or geographic location can propagate to affect across many different sectors and locations (Bak et al. 1993; Delli Gatti et al. 2009; May et al. 2008; Schweitzer et al. 2009). Understanding the severity and mechanisms behind such cascading failures has become increasingly relevant as evidenced by recent catastrophic events, such as the global 2007–2008 financial crises (Acharya and Richardson 2009; May et al. 2008) and the Coronavirus Disease 2019 (COVID-19) pandemic (Bunge and Newman 2020; Jacobs et al. 2020). For example, the 2007–2008 financial crisis initially originated in the real-estate sector © The Author(s). 2020 Open Access This article is licensed under a Creative Commons Attribution 4.0 International License, which permits
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