Seminar
Propagation Mechanisms in Dynamic Spatial Structural Equations Models
Giovanni Cerulli
CNR-IRCrES
Abstract
This paper studies propagation in dynamic spatial structural equations models through two complementary decompositions. Alongside the traditional distinction between direct (own-region) and indirect (cross-region) effects, we propose a novel pathway-based decomposition into temporal-only, spatial-only and mixed transmission, identifying the mechanisms underlying each response. Matrix derivations connect the structural equations to horizon-specific responses and clarify the relationship between the two decompositions. We also examine the stability conditions for the propagation system and its decomposed responses. For expositional purposes, we first develop the analysis using a simplified parametric model with three regions, two endogenous variables, two temporal lags and one spatial lag. We then present generalized formulas for arbitrary structural equations hyper-parameters.
Keywords: spatial dynamics; structural models; reduced form; response matrices; temporal and spatial propagation.
Time and place: 12:30 Building U7 (Via Bicocca degli Arcimboldi, 8), 4th floor, room 4096