Practicality evaluation of stochastic model on networks for the real economy simulation

Abstract

We investigate the practicality of the Bouchaud–Mezard (BM) model for the real economy simulation using an information of Japanese production network, which contains basic financial information for more than a million firms and several million links of supplier–customer links. We found that the BM model can fit the power-law tail of the sales distribution and partially predict the sales for the individual firm.