American Economic Journal:
Macroeconomics
ISSN 1945-7707 (Print) | ISSN 1945-7715 (Online)
The Geography of Consumption and Local Economic Shocks: The Case of the Great Recession
American Economic Journal: Macroeconomics
(pp. 206–44)
Abstract
We estimate across-county spending flows between firms and consumers for every county in the United States, providing a new consumption link that has not been studied previously. We highlight the importance of this link by estimating the effect of changes in local housing wealth on consumption and employment from 2001 to 2019. We generally find that the effect from changes in housing wealth crosses borders to affect consumption and employment in a pattern consistent with our spending flows. However, we find potential consumers who reside outside the local commuting zone disproportionately affect local spending and employment during the Great Recession.Citation
Dunn, Abe, and Mahsa Gholizadeh. 2025. "The Geography of Consumption and Local Economic Shocks: The Case of the Great Recession." American Economic Journal: Macroeconomics 17 (2): 206–44. DOI: 10.1257/mac.20210256Additional Materials
JEL Classification
- E21 Macroeconomics: Consumption; Saving; Wealth
- E24 Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
- E32 Business Fluctuations; Cycles
- G51 Household Finance: Household Saving, Borrowing, Debt, and Wealth
- R12 Size and Spatial Distributions of Regional Economic Activity
- R23 Urban, Rural, Regional, Real Estate, and Transportation Economics: Regional Migration; Regional Labor Markets; Population; Neighborhood Characteristics