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Magnification of the 'China shock' through the U.S. housing market.
- Source :
- Review of International Economics; Nov2023, Vol. 31 Issue 5, p1864-1893, 30p
- Publication Year :
- 2023
-
Abstract
- The 'China shock' operated in part through the housing market, which is one reason why its impact was so large on the U.S. labor market. We add housing to a multi‐region multi‐sector model, with individuals choosing whether and where to work. Controlling for housing reduces the negative direct impact of import exposure on manufacturing employment by 26%–31%, with a significant magnification through the housing market. A variance decomposition analysis shows that the indirect effect of the China shock through the housing market contributes an added 11% to the variance in manufacturing employment as compared to the direct effect of import exposure. For manufacturing and construction employment combined, the indirect effect even outweighs the direct effect. [ABSTRACT FROM AUTHOR]
- Subjects :
- HOUSING market
LABOR market
ANALYSIS of variance
Subjects
Details
- Language :
- English
- ISSN :
- 09657576
- Volume :
- 31
- Issue :
- 5
- Database :
- Complementary Index
- Journal :
- Review of International Economics
- Publication Type :
- Academic Journal
- Accession number :
- 172959561
- Full Text :
- https://doi.org/10.1111/roie.12695