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

Lorenzo Caliendo (), Fernando Parro (), Esteban Rossi-Hansberg () and Pierre-Daniel Sarte

Review of Economic Studies, 2018, vol. 85, issue 4, 2042-2096

Abstract: We study the impact of intersectoral and interregional trade linkages in propagating disaggregated productivity changes to the rest of the economy. Using U.S. regional and industry data, we obtain the aggregate, regional and sectoral elasticities of measured total factor productivity, 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 our calibrated model to perform a variety of counterfactual exercises including several specific studies of the aggregate and disaggregate effects of shocks to productivity and infrastructure. The specific episodes we study include the boom in California’s computer industry, the productivity boom in North Dakota associated with the shale oil boom, the disruptions in New York’s finance and real state industries during the 2008 crisis, as well as the effect of the destruction of infrastructure in Louisiana following hurricane Katrina.

Keywords: Regional trade; Input-output linkages; Labour mobility; Spatial economics; Economic geography; Regional productivity; Sectoral productivity (search for similar items in EconPapers)
JEL-codes: F10 F1 F16 O4 O51 R10 R12 R15 (search for similar items in EconPapers)
Date: 2018
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Related works:
Working Paper: The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy (2014) Downloads
Working Paper: The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy (2014) Downloads
Working Paper: The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy (2014) Downloads
Working Paper: The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy (2014) Downloads
Working Paper: The impact of regional and sectoral productivity changes on the U.S. economy (2013) Downloads
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