Selected publications

McNerney J, Savoie C, Caravelli F, Farmer JD, “How production networks amplify economic growth”, Proceedings of the National Academy of Sciences 119 (2022)

Technological improvement is the most important cause of long-term economic growth. In standard growth models, technology is treated in the aggregate, but an economy can also be viewed as a network in which producers buy goods, convert them to new goods, and sell the production to households or other producers. We develop predictions for how this network amplifies the effects of technological improvements as they propagate along chains of production, showing that longer production chains for an industry bias it toward faster price reduction and that longer production chains for a country bias it toward faster growth. These predictions are in good agreement with data from the World Input Output Database and improve with the passage of time. The results show that production chains play a major role in shaping the long-term evolution of prices, output growth, and structural change.

Kavlak G, McNerney J, Trancik JE, “Evaluating the causes of cost reduction in photovoltaic modules”, Energy Policy 123, 700 - 710 (2018)

Photovoltaic (PV) module costs have declined rapidly over forty years but the reasons remain elusive. Here we advance a conceptual framework and quantitative method for quantifying the causes of cost changes in a technology, and apply it to PV modules. Our method begins with a cost model that breaks down cost into variables that changed over time. Cost change equations are then derived to quantify each variable's contribution. We distinguish between changes observed in variables of the cost model – which we term low-level mechanisms of cost reduction – and research and development, learning-by-doing, and scale economies, which we refer to as high-level mechanisms. We find that in- creased module efficiency was the leading low-level cause of cost reduction in 1980–2012, contributing almost 25% of the decline. Government-funded and private R&D was the most important high-level mechanism over this period. After 2001, however, scale economies became a more significant cause of cost reduction, approaching R&D in importance. Policies that stimulate market growth have played a key role in enabling PV's cost reduction, through privately-funded R&D and scale economies, and to a lesser extent learning-by-doing. The method presented here can be adapted to retrospectively or prospectively study many technologies, and performance metrics besides cost.

McNerney J∗, Needell ZA∗, Chang MT, Miotti M, Trancik JE, “TripEnergy: Estimating personal vehicle energy consumption given limited travel survey data”, Transportation Research Record 2628, 58 - 66 (2017)

Estimating personal vehicle energy consumption is important for nation-wide climate policy, local and statewide environmental policy, and technology planning. Transportation energy use is complex, depending on vehicle performance and the driving behavior of individuals, as well as on travel patterns of cities and regions. Previous studies combine large samples of travel behavior with fixed estimates of per mile fuel economy or use detailed models of vehicles with limited samples of travel behavior. This paper presents a model for estimating privately operated vehicle energy consumption—TripEnergy—that accurately reconstructs detailed driving behavior across the United States and simulates vehicle performance for different driving conditions. The accuracy of this reconstruction was tested by using out-of-sample predictions, and the vehicle model was tested against microsimulation. TripEnergy consists of a demand model, linking GPS drive cycles to travel survey trips, and a vehicle model, efficiently simulating energy consumption across different types of driving. Because of its ability to link small-scale variation in vehicle technology and driver behavior with large-scale variation in travel patterns, it is expected to be useful for a variety of applications, including technology assessment, cost and energy savings from ecodriving, and the integration of electric vehicle technologies into the grid.

McNerney J, Fath BD, Silverberg G, “Network structure of inter-industry flows”, Physica A 392, 6427 - 6441 (2013)

We study the structure of inter-industry relationships using networks of money flows between industries in 45 national economies. We find these networks vary around a typical structure characterized by a Weibull link weight distribution, exponential industry size distribution, and a common community structure. The community structure is hierarchical, with the top level of the hierarchy comprising five industry communities: food industries, chemical industries, manufacturing industries, service industries, and extraction industries.

McNerney J, Farmer JD, Redner S, Trancik JE, “Role of design complexity in technology improvement”, Proceedings of the National Academy of Sciences 108, 9009 - 9013 (2011)

We study a simple model for the evolution of the cost (or more generally the performance) of a technology or production process. The technology can be decomposed into n components, each of which interacts with a cluster of d - 1 other components. Innovation occurs through a series of trial-and-error events, each of which consists of randomly changing the cost of each component in a cluster, and accepting the changes only if the total cost of the cluster is lowered. We show that the relationship between the cost of the whole technology and the number of innovation attempts is asymptotically a power law, matching the functional form often observed for empirical data. The exponent alpha of the power law depends on the intrinsic difficulty of finding better components, and on what we term the design complexity: the more complex the design, the slower the rate of improvement. Letting d as defined above be the connectivity, in the special case in which the connectivity is constant, the design complexity is simply the connectivity. When the connectivity varies, bottlenecks can arise in which a few components limit progress. In this case the design complexity depends on the details of the design. The number of bottlenecks also determines whether progress is steady, or whether there are periods of stasis punctuated by occasional large changes. Our model connects the engineering properties of a design to historical studies of technology improvement.

McNerney J, Li Y, Gomez-Lievano A, Neffke F, “Bridging the short-term and long-term dynamics of economic structural change”, In review (2022)

In the short-term, economies shift preferentially into new activities that are related to ones they currently do. Such a tendency should have implications for the nature of an economy's long-term development as well. We explore these implications using a dynamical network model of an economy's movement into new activities. First, we theoretically derive a pair of coordinates that summarize long-term structural change. One coordinate captures overall ability across activities, the other captures an economy's composition. Second, we show empirically how these two measures intuitively summarize a variety of facts of long-term economic development. Third, we observe that our measures resemble complexity metrics, though our route to these metrics differs significantly from previous ones. In total, our framework represents a dynamical approach that bridges short- and long-term descriptions of structural change, and suggests how different branches of economic complexity analysis could potentially fit together in one framework.

Full publication list

* = Authors contributed equally

In review

Working papers

  • McNerney J, Trancik JE, “A mathematical theory of technology scaling”

  • Nedelkoska L, Matha SG, Diodato D, Assumpcao A, McNerney J, Neffke F, “Lessons from 80 years of change in occupational tasks in the U.S. (1939-2020)”

Publications

Patents