Demand-Driven Propagation : Evidence from the Great Recession
This paper provides empirical evidence for the Keynesian demand-driven propagation: initial rounds of job losses lead to additional rounds of job losses. The paper shows that U.S. counties with higher pre-existing exposure to tradable industries ex...
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| Format: | Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2015
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| Online Access: | http://documents.worldbank.org/curated/en/2015/10/25202680/demand-driven-propagation-evidence-great-recession http://hdl.handle.net/10986/22869 |
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okr-10986-228692021-04-23T14:04:11Z Demand-Driven Propagation : Evidence from the Great Recession Nguyen, Hu JOBS EMPLOYMENT MONETARY POLICY STORE MULTIPLIERS PRODUCTION FINANCING RETIREMENT MINIMUM WAGE INCOME SERVICE SECTOR INTEREST RATE LIQUIDITY EXPORTS ELASTICITY HEALTH CARE POLITICAL ECONOMY RECESSION JOB COMPANIES EFFECTS INCENTIVES HEALTH ECONOMIC POLICY LABOR ECONOMICS RISING UNEMPLOYMENT LOAN VARIABLES LABOR STATISTICS WEALTH JOB LOSSES BANK LENDING CHOICE LABOR MARKET KEYNESIAN ECONOMICS GOVERNMENT REGULATIONS UNEMPLOYED WORKERS WAGE ADJUSTMENT WORKER UNEMPLOYED JOB LOSS DEBT MARKETS HOUSEHOLD INCOME LABOR MARKET OUTCOME ORGANIZATIONS BUSINESS CYCLE LABOR TOTAL EMPLOYMENT FINANCE STORES TAXES AGGREGATE DEMAND EFFECTS UNEMPLOYMENT CONSUMPTION FIRMS WORKERS WAGES POLICIES TOTAL EMPLOYMENT LOCAL LABOR MARKETS UNEMPLOYMENT RATE WAGE RIGIDITY LABOR DEMAND HIGH EMPLOYMENT CARE CREDIT MACROECONOMICS ECONOMIC SECTORS PURCHASING POWER DEMAND NOMINAL WAGES AGGREGATE DEMAND CONSUMERS ENTERPRISE EMPLOYMENT GROWTH DOWNWARD BIAS MARKET BENCHMARK ECONOMICS SERVICE INDUSTRY MACROECONOMIC EFFECTS MANUFACTURING INDUSTRIES GOODS THEORY INVESTMENT POVERTY CRISES SUPPLY INNOVATION POPULATION LABOR SUPPLY BORROWING LENDING LOCAL LABOR MARKET ECONOMIC HISTORY FULL EMPLOYMENT LABOR MARKETS SEE LABOR SHARE PRICES LABOR REALLOCATION DEVELOPMENT POLICY This paper provides empirical evidence for the Keynesian demand-driven propagation: initial rounds of job losses lead to additional rounds of job losses. The paper shows that U.S. counties with higher pre-existing exposure to tradable industries experienced larger job losses in non-tradable sectors during the Great Recession. This was arguably because laid-off tradable workers cut their consumption, which hurts local non-tradable firms. The finding is not driven by exposure to the construction sector, by the collapse in house prices, or by credit supply problems. In addition, the spillover is stronger when the focus is on the job losses of more income-elastic non-tradable sectors. 2015-11-05T17:03:27Z 2015-11-05T17:03:27Z 2015-10 Working Paper http://documents.worldbank.org/curated/en/2015/10/25202680/demand-driven-propagation-evidence-great-recession http://hdl.handle.net/10986/22869 English en_US Policy Research Working Paper;No. 7456 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research United States |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
JOBS EMPLOYMENT MONETARY POLICY STORE MULTIPLIERS PRODUCTION FINANCING RETIREMENT MINIMUM WAGE INCOME SERVICE SECTOR INTEREST RATE LIQUIDITY EXPORTS ELASTICITY HEALTH CARE POLITICAL ECONOMY RECESSION JOB COMPANIES EFFECTS INCENTIVES HEALTH ECONOMIC POLICY LABOR ECONOMICS RISING UNEMPLOYMENT LOAN VARIABLES LABOR STATISTICS WEALTH JOB LOSSES BANK LENDING CHOICE LABOR MARKET KEYNESIAN ECONOMICS GOVERNMENT REGULATIONS UNEMPLOYED WORKERS WAGE ADJUSTMENT WORKER UNEMPLOYED JOB LOSS DEBT MARKETS HOUSEHOLD INCOME LABOR MARKET OUTCOME ORGANIZATIONS BUSINESS CYCLE LABOR TOTAL EMPLOYMENT FINANCE STORES TAXES AGGREGATE DEMAND EFFECTS UNEMPLOYMENT CONSUMPTION FIRMS WORKERS WAGES POLICIES TOTAL EMPLOYMENT LOCAL LABOR MARKETS UNEMPLOYMENT RATE WAGE RIGIDITY LABOR DEMAND HIGH EMPLOYMENT CARE CREDIT MACROECONOMICS ECONOMIC SECTORS PURCHASING POWER DEMAND NOMINAL WAGES AGGREGATE DEMAND CONSUMERS ENTERPRISE EMPLOYMENT GROWTH DOWNWARD BIAS MARKET BENCHMARK ECONOMICS SERVICE INDUSTRY MACROECONOMIC EFFECTS MANUFACTURING INDUSTRIES GOODS THEORY INVESTMENT POVERTY CRISES SUPPLY INNOVATION POPULATION LABOR SUPPLY BORROWING LENDING LOCAL LABOR MARKET ECONOMIC HISTORY FULL EMPLOYMENT LABOR MARKETS SEE LABOR SHARE PRICES LABOR REALLOCATION DEVELOPMENT POLICY |
| spellingShingle |
JOBS EMPLOYMENT MONETARY POLICY STORE MULTIPLIERS PRODUCTION FINANCING RETIREMENT MINIMUM WAGE INCOME SERVICE SECTOR INTEREST RATE LIQUIDITY EXPORTS ELASTICITY HEALTH CARE POLITICAL ECONOMY RECESSION JOB COMPANIES EFFECTS INCENTIVES HEALTH ECONOMIC POLICY LABOR ECONOMICS RISING UNEMPLOYMENT LOAN VARIABLES LABOR STATISTICS WEALTH JOB LOSSES BANK LENDING CHOICE LABOR MARKET KEYNESIAN ECONOMICS GOVERNMENT REGULATIONS UNEMPLOYED WORKERS WAGE ADJUSTMENT WORKER UNEMPLOYED JOB LOSS DEBT MARKETS HOUSEHOLD INCOME LABOR MARKET OUTCOME ORGANIZATIONS BUSINESS CYCLE LABOR TOTAL EMPLOYMENT FINANCE STORES TAXES AGGREGATE DEMAND EFFECTS UNEMPLOYMENT CONSUMPTION FIRMS WORKERS WAGES POLICIES TOTAL EMPLOYMENT LOCAL LABOR MARKETS UNEMPLOYMENT RATE WAGE RIGIDITY LABOR DEMAND HIGH EMPLOYMENT CARE CREDIT MACROECONOMICS ECONOMIC SECTORS PURCHASING POWER DEMAND NOMINAL WAGES AGGREGATE DEMAND CONSUMERS ENTERPRISE EMPLOYMENT GROWTH DOWNWARD BIAS MARKET BENCHMARK ECONOMICS SERVICE INDUSTRY MACROECONOMIC EFFECTS MANUFACTURING INDUSTRIES GOODS THEORY INVESTMENT POVERTY CRISES SUPPLY INNOVATION POPULATION LABOR SUPPLY BORROWING LENDING LOCAL LABOR MARKET ECONOMIC HISTORY FULL EMPLOYMENT LABOR MARKETS SEE LABOR SHARE PRICES LABOR REALLOCATION DEVELOPMENT POLICY Nguyen, Hu Demand-Driven Propagation : Evidence from the Great Recession |
| geographic_facet |
United States |
| relation |
Policy Research Working Paper;No. 7456 |
| description |
This paper provides empirical evidence
for the Keynesian demand-driven propagation: initial rounds
of job losses lead to additional rounds of job losses. The
paper shows that U.S. counties with higher pre-existing
exposure to tradable industries experienced larger job
losses in non-tradable sectors during the Great Recession.
This was arguably because laid-off tradable workers cut
their consumption, which hurts local non-tradable firms. The
finding is not driven by exposure to the construction
sector, by the collapse in house prices, or by credit supply
problems. In addition, the spillover is stronger when the
focus is on the job losses of more income-elastic
non-tradable sectors. |
| format |
Working Paper |
| author |
Nguyen, Hu |
| author_facet |
Nguyen, Hu |
| author_sort |
Nguyen, Hu |
| title |
Demand-Driven Propagation : Evidence from the Great Recession |
| title_short |
Demand-Driven Propagation : Evidence from the Great Recession |
| title_full |
Demand-Driven Propagation : Evidence from the Great Recession |
| title_fullStr |
Demand-Driven Propagation : Evidence from the Great Recession |
| title_full_unstemmed |
Demand-Driven Propagation : Evidence from the Great Recession |
| title_sort |
demand-driven propagation : evidence from the great recession |
| publisher |
World Bank, Washington, DC |
| publishDate |
2015 |
| url |
http://documents.worldbank.org/curated/en/2015/10/25202680/demand-driven-propagation-evidence-great-recession http://hdl.handle.net/10986/22869 |
| _version_ |
1764452279084122112 |