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

47 Pages Posted: 2 Jun 2014

See all articles by Lorenzo Caliendo

Lorenzo Caliendo

Yale University - School of Management

Fernando Parro

Federal Reserve Board

Esteban Rossi-Hansberg

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Pierre-Daniel G. Sarte

Federal Reserve Bank of Richmond

Multiple version iconThere are 3 versions of this paper

Date Written: May 2014

Abstract

We study the impact of intersectoral and interregional trade linkages in propagating disaggregated productivity changes to the rest of the economy. Using regional and industry data we obtain the aggregate, regional and sectoral elasticities of measured TFP, 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 these elasticities to perform a variety of counterfactual exercises including a detailed study of the effects of the boom in the Computers and Electronics industry in California.

Suggested Citation

Caliendo, Lorenzo and Parro, Fernando and Rossi-Hansberg, Esteban Alejandro and Sarte, Pierre-Daniel, The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy (May 2014). NBER Working Paper No. w20168. Available at SSRN: https://ssrn.com/abstract=2444535

Lorenzo Caliendo (Contact Author)

Yale University - School of Management ( email )

135 Prospect Street
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United States

HOME PAGE: http://faculty.som.yale.edu/lorenzocaliendo

Fernando Parro

Federal Reserve Board ( email )

20th Street and Constitution Avenue NW
Washington, DC 20551
United States

Esteban Alejandro Rossi-Hansberg

Princeton University - Department of Economics ( email )

Princeton, NJ
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Pierre-Daniel Sarte

Federal Reserve Bank of Richmond ( email )

P.O. Box 27622
Richmond, VA 23261
United States

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