Demand-driven Propagation: Evidence from the Great Recession

Ha Nguyen
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Ha Nguyen: The World Bank
Authors registered in the RePEc Author Service: Nguyen Phu Ha () and Ha Nguyen

No 397, 2017 Meeting Papers from Society for Economic Dynamics

Abstract: This paper presents evidence for the propagation of job losses in the U.S. during the Great Recession. Using county-level tradable job losses (driven by declines in aggregate demand) as an instrument, it shows that retail and restaurant employment fell by 0.34% for every 1% job losses in the rest of the county’s economy. The finding is not driven by the collapse in house price or by credit supply problems. In addition, the spillover is more severe for more income-elastic retail and restaurant industries, which suggest a role for the demand-driven propagation.

Date: 2017
New Economics Papers: this item is included in nep-ure
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Related works:
Working Paper: Demand-driven propagation: evidence from the great recession (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:red:sed017:397

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