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The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy

  • Lorenzo Caliendo
  • Fernando Parro
  • Esteban Rossi-Hansberg
  • Pierre-Daniel Sarte

We study the impact of intersectoral and interregional trade linkages in propagating disaggregated productivity changes to the rest of the economy. Using regional and industry data we obtain the aggregate, regional and sectoral elasticities of measured TFP, GDP, and employment to regional and sectoral productivity changes. We find that the elasticities vary significantly depending on the sectors and regions affected and are importantly determined by the spatial structure of the economy. We use these elasticities to perform a variety of counterfactual exercises including a detailed study of the effects of the boom in the Computers and Electronics industry in California.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 20168.

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Date of creation: May 2014
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Handle: RePEc:nbr:nberwo:20168
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