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Magnification of the ‘China Shock’ Through the U.S. Housing Market


  • Yuan Xu
  • Hong Ma
  • Robert C. Feenstra


The ‘China shock’ operated in part through the housing market, and that is an important reason why the China shock was as big as it was. If housing prices had not responded at all to the China shock, then the total employment effect of the China shock would have been reduced by more than one-half. Housing prices in the United States did respond to the China shock, however, so the independent employment effect of the China shock is reduced by about 20–30%, with that remainder reflecting exogenous changes in housing prices.

Suggested Citation

  • Yuan Xu & Hong Ma & Robert C. Feenstra, 2019. "Magnification of the ‘China Shock’ Through the U.S. Housing Market," NBER Working Papers 26432, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:26432
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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