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The Geography of the Great Recession

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  • Alessandra Fogli
  • Enoch Hill
  • Fabrizio Perri

Abstract

This paper documents, using county level data, some geographical features of the US business cycle over the past 30 years, with particular focus on the Great Recession. It shows that county level unemployment rates are spatially dispersed and spatially correlated, and documents how these characteristics evolve during recessions. It then shows that some of these features of county data can be generated by a model which includes simple channels of transmission of economic conditions from a county to its neighbors. The model suggests that these local channels are quantitatively important for the amplification/muting of aggregate shocks.
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Suggested Citation

  • Alessandra Fogli & Enoch Hill & Fabrizio Perri, 2013. "The Geography of the Great Recession," NBER International Seminar on Macroeconomics, University of Chicago Press, vol. 9(1), pages 305-331.
    • Handle: RePEc:ucp:intsma:doi:10.1086/669195
    DOI: 10.1086/669195
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    Cited by:

    1. Lorenzo Caliendo & Fernando Parro & Esteban Rossi-Hansberg & Pierre-Daniel Sarte, 2018. "The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy," Review of Economic Studies, Oxford University Press, vol. 85(4), pages 2042-2096.
    2. Andrew Foote & Michel Grosz & Ann Stevens, 2019. "Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response," ILR Review, Cornell University, ILR School, vol. 72(1), pages 101-126, January.
    3. Hyun, Junghwan, 2016. "Financial crises and the evolution of credit reallocation: Evidence from Korea," Economic Modelling, Elsevier, vol. 56(C), pages 25-34.
    4. Rodney Ramcharan & Stéphane Verani & Skander J. Van Den Heuvel, 2016. "From Wall Street to Main Street: The Impact of the Financial Crisis on Consumer Credit Supply," Journal of Finance, American Finance Association, vol. 71(3), pages 1323-1356, June.
    5. Vicente Cuñat & Dragana Cvijanović & Kathy Yuan, 2018. "Within-Bank Spillovers of Real Estate Shocks," Review of Corporate Finance Studies, Oxford University Press, vol. 7(2), pages 157-193.
    6. Saara Tamminen, 2017. "Regional effects or none? Firms' profitability during the Great Recession in Finland," Papers in Regional Science, Wiley Blackwell, vol. 96(1), pages 33-59, March.
    7. Jaqueson K. Galimberti, 2020. "Forecasting GDP Growth from Outer Space," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 82(4), pages 697-722, August.
    8. Sarah Bohn & Robert Santillano, 2017. "Local Immigration Enforcement and Local Economies," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 56(2), pages 236-262, April.
    9. Arabinda Basistha & Casto Martin Montero Kuscevic, 2017. "The role of spatial GDP spillovers in state-level Okun’s law," Letters in Spatial and Resource Sciences, Springer, vol. 10(3), pages 353-360, October.
    10. Stumpner, Sebastian, 2019. "Trade and the geographic spread of the great recession," Journal of International Economics, Elsevier, vol. 119(C), pages 169-180.
    11. Sergei S. Shibaev, 2016. "Recession Propagation In Small Regional Economies: Spatial Spillovers And Endogenous Clustering," Working Paper 1369, Economics Department, Queen's University.
    12. Mai Dao & Davide Furceri & Prakash Loungani, 2014. "Regional Labor Market Adjustments in the United States and Europe," IMF Working Papers 2014/026, International Monetary Fund.
    13. Mai Dao & Davide Furceri & Prakash Loungani, 2014. "Regional Labor Market Adjustments in the United States," IMF Working Papers 2014/211, International Monetary Fund.

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    More about this item

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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