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Trade and the geographic spread of the great recession

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  • Stumpner, Sebastian

Abstract

I study the role of trade between U.S. states in the regional propagation of local consumer demand shocks during the Great Recession. To identify the trade channel empirically, I make use of heterogeneity in the direction of trade flows across industries in the same state: Industries that depended relatively more on final demand from states with housing boom-bust cycles grew by more before the crisis and declined faster from 2007 to 09. A one standard deviation difference in the exposure to demand shocks during the recession explains a 2.9 percentage point difference in employment growth.

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  • Stumpner, Sebastian, 2019. "Trade and the geographic spread of the great recession," Journal of International Economics, Elsevier, vol. 119(C), pages 169-180.
    • Handle: RePEc:eee:inecon:v:119:y:2019:i:c:p:169-180
    DOI: 10.1016/j.jinteco.2019.04.001
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    2. Zhenyu Gao & Michael Sockin & Wei Xiong, 2019. "Economic Consequences of Housing Speculation," NBER Working Papers 26457, National Bureau of Economic Research, Inc.
    3. Babatunde Buraimo & Giuseppe Migali & Rob Simmons, 2022. "Impacts of the Great Recession on sport: evidence from English Football League attendance demand [US household tourism expenditure and the great recession: an analysis with the consumer expenditure," Oxford Economic Papers, Oxford University Press, vol. 74(1), pages 155-177.
    4. Walter Steingress, 2018. "The causal impact of migration on US trade: Evidence from political refugees," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 51(4), pages 1312-1338, November.
    5. Antoine Berthou & Sebastian Stumpner, 2022. "Trade Under Lockdown," Working papers 867, Banque de France.
    6. Ahrend, Rudiger & Goujard, Antoine, 2014. "Are all forms of financial integration equally risky? Asset price contagion during the global financial crisis," Journal of Financial Stability, Elsevier, vol. 14(C), pages 35-53.
    7. McCrory, Peter B, 2020. "Tradable Spillovers of Fiscal Policy: Evidence from the 2009 Recovery Act," Institute for Research on Labor and Employment, Working Paper Series qt04n482qf, Institute of Industrial Relations, UC Berkeley.
    8. John A. Mondragon & Johannes Wieland, 2022. "Housing Demand and Remote Work," NBER Working Papers 30041, National Bureau of Economic Research, Inc.
    9. Imbs, Jean & Pauwels, Laurent, 2019. "Fundamental Moments," Working Papers BAWP-2019-06, University of Sydney Business School, Discipline of Business Analytics.
    10. Wall, Howard, 2023. "The Great, Greater, and Greatest Recessions of US States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 53(1), January.

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    More about this item

    Keywords

    Interregional trade; Regional propagation; Great recession;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions

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