Alisha Saini
Ph.D Candidate
Job Market Candidate, 2025-2026
Economics
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Fields: Macroeconomics, International Trade, Networks
References: George Karras, Jacob Robbins, Lawrence Christiano, Lorenzo Rotunno
Job Market Paper: How Government Procurement affects Trade: Evidence from the U.S.
Abstract: Government procurement is a major fiscal instrument, yet its implications for international trade remain poorly understood. Using granular U.S. Department of Defense contract data from 2000–2024, I provide the first industry-level evidence on how government spending shapes trade flows. Estimating panel local projections across 375 industries, I find that defense spending leads to modest but persistent increases in imports—accumulating to roughly 29% of initial spending over two years—while exports respond minimally. These effects are concentrated in industries that are defense-intensive and globally integrated, suggesting that transmission operates through supply-chain linkages within the defense industrial base. A network decomposition further shows that upstream procurement shocks generate import responses comparable to direct effects, whereas downstream procurement shocks crowd out exports at longer horizons. These findings highlight that defense spending, while predominantly domestic in nature, generates sizable fiscal leakage through international trade channels.