New York Times
February 6, 2012
It’s now conventional wisdom that the fate of the U.S. economy over the next three quarters — and hence, also, Obama’s reelection chances — depend on events in Europe. So maybe this is a good time to express some skepticism.
The map above — taken from here — tells us that overall, exports to Europe are just 2 percent of GDP. Some states, notably South Carolina, are more exposed (presumably because of those European-owned auto plants). But Obama isn’t going to win South Carolina in any case. And more broadly, even a sharp fall in exports to Europe would be only a small direct hit to demand.
OK, caveats: this only measures goods exports, and we should mark the numbers up maybe 25 percent to take account of services. Also, exports aren’t the only channel: if European events cause a Lehman-type event, disrupting financial markets world-wide, all bets are off.
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