To track the sensitivity of regional growth to international flows, shift-share components can be decomposed into import, export, and domestic market segments and a productivity component. By merging data on regional employment, national employment and output, and international trade, dynamic shift-share analysis is used to compare the experience of U.S. regions for the period from 1978 to 1986. Some regions, like New England and the Pacific, have relatively positive industrial mixes for both export and domestic market growth, while others, particularly the East North Central region, have negative ones. Dynamizing the model with annual data does not necessarily minimize the gap between national and regional growth rates, and results, especially for the competitive shift component, remain sensitive to subperiod designation. Regions have different stakes in national trade policy, and some would do better to target domestic rather than overseas markets.

The ongoing global financial turmoil has increased the importance of understanding the potential spillover effects brought about by financial interlinkages. This article focuses on such interlinkages within Europe and potential contagion channeled through these interlinkages. It discusses the increased role of external financing as a source of funding for credit growth before the turmoil; analyzes potential channels of contagion through financial linkages; and assesses the magnitude of cross-border exposures between emerging and advanced European economies. Based on the stylized facts on these exposures, the article provides indices of exposure to regional contagion that could help identify the likely pressure points and capture potential spillover effects and propagation channels of a regional shock originating from a given country.

Metropolitan areas across the United States are quite differentially positioned to benefit from greater international market integration. The authors hypothesizefzat because cities possess quite diverse industrial mixes, their stakes in national trade regimes and appropriate strategies for responding to altered trade opportunities will differ substantially. Using a modified shift-share technique with merged trade and industrial data at the three-digit level, the authors show that cities do indeed range widely in their relative comparative advantages. Furthermore, cities within a single state often have quite different stakes in heightened trade activity; some are better positioned to export, whereas others have more to gain from import protection or policies to strengthen domestic markets. Possessing a port no longer assures a metropolitan area a superior advantage in trade. The authors conclude that cities should study and fashion their own trade policies uniquely to match their existing and future capabilities.

Using an expanded shift share technique to impute international trade-related industrial job change, the extent to which structural changes in trade and defense spending appear to explain state economic performance differentials is explored. The findings show there is limited support for the "trade perimeter" argument, but strong support for the hypothesized relationship between military procurement spending and state trade performance. To the extent that defense commitments, especially to private sector procurement and R & D, have operated as an informal industrial policy, particularly by guaranteeing strong domestic sales, they have enabled a significant number of states peripheral to the traditional industrial heartland to build a strong international trade posture. The conclusion offers observations on the economic development implications of these findings.