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

Economic Systems Research, Forthcoming

23 Pages Posted: 7 Jul 2009 Last revised: 4 Jun 2014

Jianxi Luo

Singapore University of Technology and Design

Date Written: January 1, 2009

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.

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

Suggested Citation

Luo, Jianxi, Which Industries to Bail Out First in Economic Recession? Ranking U.S. Industrial Sectors by the Power-of-Pull (January 1, 2009). Economic Systems Research, Forthcoming. Available at SSRN: https://ssrn.com/abstract=1430162 or http://dx.doi.org/10.2139/ssrn.1430162

Jianxi Luo (Contact Author)

Singapore University of Technology and Design ( email )

20 Dover Drive
Singapore, 138682
Singapore

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