|Author Name||Robert DEKLE (University of Southern California) / Eunpyo HONG (University of Southern California) / Wei XIE (University of Southern California)|
|Creation Date/NO.||March 2016 16-E-049|
|Research Project||Geospatial Networks and Spillover Effects in Inter-organizational Economic Activities|
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In this paper, we trace out how a decline in industrial production in one region can be propagated throughout a country. We use the model to measure how a shock to industrial production in Tohoku—owing to the earthquake and tsunami from 2011—can be propagated throughout Japan. In our econometric model, regions and industries within regions are linked by specific structures, and these structures discipline how the shocks are spatially propagated.