The Great Recession (Dec. 2007 to June 2009) not only shrunk U.S. GDP and employment levels, but also dramatically diminished international trade. This trade collapse was both national and global. But it also had regional effects. So we highlight the trade collapse’s effect on the state of Missouri and compare that with the decline for the U.S. as a whole.
The graph above maps the number of exporting firms, which is a measure of the extensive margin for exports. The graph below maps average export revenues, which is an approximation of the intensive margin, which refers to an individual firm’s exports. The total real value of U.S. exports dropped 17.9 percent between 2008 and 2009. The number of U.S. exporting firms and the real value of average exports dropped by 4.5 percent and 14.1 percent, respectively, during the same period. Missouri saw much sharper declines over the same period: 25.4 percent (total exports), 6.6 percent (number of exporting firms), and 20.2 percent (average exports).
What is intriguing is that changes to the number of exporting firms in Missouri roughly align with the national situation, but Missouri’s average export revenues exhibit some interesting differences. The nation’s average export revenues peaked in 2007, fell slightly in 2008, fell sharply in 2009, and smartly recovered after that. Missouri’s average export revenues, on the other hand, peaked in 2006 and then fell quite sharply until 2009; then they had a rather anemic recovery after that. This stark difference in Missouri’s intensive margin (relative to the nation) is worthy of further attention.
How these graphs were created: For the top graph, search for and select “number of exporters to all countries from the United States” and use the “Add Data Series” option to search for “number of exporters to all countries from Missouri” and add that series to the graph. Place the Missouri series on the right y-axis. For the bottom graph, search and select “CPI all consumers”: Under the “Frequency” menu, select “Annual.” Under the “Units” menu, select “Index (Scale value to 100 for chosen period)” and set the “observation date” to 2009-01-01. This preliminary step is necessary to report the value of exports in 2009 dollars. Now modify the existing series by adding two series, “value of exports to all countries from the United States” and “number of exporters to all countries from the United States,” through the “Add Data Series / “Modify Existing Series” options. Finally, use the “Create your own data transformation” option and insert the formula (b/a)*100/c. Repeat the same steps with the corresponding Missouri series and place this new series on the right y-axis.
Suggested by Subhayu Bandyopadhyay and Rodrigo Guerrero
