Which Industries to Bail Out First in Economic Recession? Ranking U.S. Industrial Sectors by the Power-of-Pull

Abstract:     
There have been intense debates regarding which industrial sectors should be prioritized for receiving bailout in economic recessions. This paper takes a network perspective to rank sectors according to the Power-of-Pull, i.e. a sector’s power to pull the overall economy. An eigenvector method is employed to assess the Power-of-Pull of sectors in the United States, using input-output data from 1998 to 2010. The results support bailout to the motor vehicle sector, but argue against bailout to public infrastructure, health care and IT design and service sectors, and also reveal the continual decline of Power-of-Pull ranking of computer and electronics manufacturing sector over time. These results confirm some but also show little support to some other economic revival policies of the Obama Administration in the United States.

Number of Pages in PDF File: 23

Keywords: Economic recession, Bailout; Stimulus, Network analysis, Power-of-Pull, Input-Output table

Accepted Paper Series