Score contribution per author:
α: calibrated so average coauthorship-adjusted count equals average raw count
I study the role of trade between U.S. states in the regional propagation of local consumer demand shocks during the Great Recession. To identify the trade channel empirically, I make use of heterogeneity in the direction of trade flows across industries in the same state: Industries that depended relatively more on final demand from states with housing boom-bust cycles grew by more before the crisis and declined faster from 2007 to 09. A one standard deviation difference in the exposure to demand shocks during the recession explains a 2.9 percentage point difference in employment growth.