Breaking Bad: Supply Chain Disruptions in a Streamlined Agent Based Model

We explore the macro-financial consequences of disruption a supply chain in an agent based framework characterized by two networks, credit network connecting banks and firms production upstream down-stream firms. consider scenarios. In first one, because lockdown all are forced to cut production. This generates sizable down-turn during due indirect effects shock (network financial accelerator). second scenario, only those located “red zone” contract this case recession is milder recovery begins earlier. Upstream hit shock, fact, will be abandoned their customers who switch suppliers outside red zone. way endogenously reconstruct (at least part) after disruption. main determinant mitigated impact type lockdown.