  We model an economy-wide production network by cascading binary compounding
functions, based on the sequential processing nature of the production
activities. As we observe a hierarchy among the intermediate processes spanning
the empirical input--output transactions, we utilize a stylized sequence of
processes for modeling the intra-sectoral production activities. Under the
productivity growth that we measure jointly with the state-restoring elasticity
parameters for each sectoral activity, the network of production completely
replicates the records of multi-sectoral general equilibrium prices and shares
for all factor inputs observed in two temporally distant states. Thereupon, we
study propagation of a small exogenous productivity shock onto the structure of
production networks by way of hierarchical clustering.
