Huber, Kilian. <br/><br/>
Estimating General Equilibrium Spillovers of Large-Scale Shocks / 
Kilian Huber. 
 - Cambridge, Mass.  National Bureau of Economic Research  2022. 
 - 1 online resource:  illustrations (black and white); 
 - NBER working paper series  no. w29908 .
 - Working Paper Series (National Bureau of Economic Research)  no. w29908. .
<br/><br/> April 2022. 
<br/><br/> Large-scale financial and macroeconomic shocks directly affect some firms and households and indirectly impact others through general equilibrium spillovers. In this paper, I describe how researchers can estimate spillovers directly using quasi-experimental or experimental variation. I then argue that spillover estimates suffer from distinct sources of mechanical bias that standard empirical tools cannot resolve. These biases are particularly relevant in finance and macroeconomics where multiple spillover channels and nonlinear effects are common. I offer guidance on how to detect and overcome mechanical biases. An application to a credit shock and additional examples highlight the broad relevance of the suggested methods. 
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