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The Geography of the Great Recession

Author

Listed:
  • 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.

Suggested Citation

  • Alessandra Fogli & Enoch Hill & Fabrizio Perri, 2012. "The Geography of the Great Recession," NBER Working Papers 18447, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18447
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    References listed on IDEAS

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    1. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
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    6. James D. Hamilton & Michael T. Owyang, 2012. "The Propagation of Regional Recessions," The Review of Economics and Statistics, MIT Press, vol. 94(4), pages 935-947, November.
    7. Atif Mian & Amir Sufi, 2010. "Household Leverage and the Recession of 2007–09," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 58(1), pages 74-117, August.
    8. Alessandra Fogli & Laura Veldkamp, 2011. "Nature or Nurture? Learning and the Geography of Female Labor Force Participation," Econometrica, Econometric Society, vol. 79(4), pages 1103-1138, July.
    9. Klaus Desmet & Esteban Rossi-Hansberg, 2010. "On Spatial Dynamics," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 43-63.
    10. James LeSage & R. Kelley Pace, 2010. "Spatial Econometrics," Book Chapters,in: Web Book of Regional Science Regional Research Institute, West Virginia University.
    11. Eleonora Patacchini & Yves Zenou, 2007. "Spatial dependence in local unemployment rates," Journal of Economic Geography, Oxford University Press, vol. 7(2), pages 169-191, March.
    12. Stijn Van Nieuwerburgh & Pierre-Olivier Weill, 2010. "Why Has House Price Dispersion Gone Up?," Review of Economic Studies, Oxford University Press, vol. 77(4), pages 1567-1606.
    13. John Y. Campbell & Stefano Giglio & Parag Pathak, 2011. "Forced Sales and House Prices," American Economic Review, American Economic Association, vol. 101(5), pages 2108-2131, August.
    14. Martin, Philippe & Mayer, Thierry & Mayneris, Florian, 2011. "Spatial concentration and plant-level productivity in France," Journal of Urban Economics, Elsevier, vol. 69(2), pages 182-195, March.
    15. Burgess, Simon & Profit, Stefan, 2001. "Externalities in the matching of workers and firms in Britain," LSE Research Online Documents on Economics 20130, London School of Economics and Political Science, LSE Library.
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    Citations

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    Cited by:

    1. Pierre-Daniel G. Sarte & Esteban Rossi-Hansberg & Fernando Parro & Lorenzo Caliendo, 2013. "The impact of regional and sectoral productivity changes on the U.S. economy," Working Paper 13-14, Federal Reserve Bank of Richmond.
    2. Mai Dao & Davide Furceri & Prakash Loungani, 2014. "Regional Labor Market Adjustments in the United States," IMF Working Papers 14/211, International Monetary Fund.
    3. Andrew Foote & Michel Grosz & Ann Stevens, 2015. "Locate Your Nearest Exit: Mass Layoffs and Local Labor Market Response," Working Papers 15-25, Center for Economic Studies, U.S. Census Bureau.
    4. Hyun, Junghwan, 2016. "Financial crises and the evolution of credit reallocation: Evidence from Korea," Economic Modelling, Elsevier, vol. 56(C), pages 25-34.
    5. 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.
    6. repec:bla:presci:v:96:y:2017:i:1:p:33-59 is not listed on IDEAS
    7. repec:bla:indres:v:56:y:2017:i:2:p:236-262 is not listed on IDEAS
    8. repec:spr:lsprsc:v:10:y:2017:i:3:d:10.1007_s12076-017-0189-7 is not listed on IDEAS
    9. Sergei Shibaev, 2016. "Recession Propagation in Small Regional Economies: Spatial Spillovers and Endogenous Clustering," Working Papers 1369, Queen's University, Department of Economics.
    10. Jaqueson K Galimberti, 2017. "Forecasting GDP growth from the outer space," KOF Working papers 17-427, KOF Swiss Economic Institute, ETH Zurich.
    11. Mai Dao & Davide Furceri & Prakash Loungani, 2014. "Regional Labor Market Adjustments in the United States and Europe," IMF Working Papers 14/26, International Monetary Fund.

    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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