If it rains very hard during a major storm, the drains in the streets may not be able to handle all the water and flooding will temporarily occur. Use this analogy to explain why the pace of imports into a community may be important in the short run for economic adjustment. 

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Application 2 CHINESE IMPORTS AND LOCAL ECONOMIES APPLYING THE CONCEPTS #2: What have been the local effects of Chinese imports? MADE IN CHINA Do imports from China really make a difference in U.S. labor markets? Economists David Autor, David Dorn, and Gordon Hanson examined detailed data on Chinese imports into local communities. Some local communities are more heavily impacted by Chinese imports than others depending on the mix of products produced locally. The authors found that the pace of Chinese import growth was so rapid from 1990 to 2007 that it often had a strong and negative effect on local economies. Those communities that were more exposed to imports had larger increases in workers receiving unemployment insurance, food stamps, and disability payments. These findings do not mean that trade with China was not ultimately beneficial. Displaced workers can find new jobs and import competition lowers prices for all consumers. But it does mean that the burden of adjustment to imports varies by region. Some regions will have a more difficult time adjusting than others to a sudden influx of imports. The study also does not mea- sure the indirect benefits from trade with China. As the Chinese economy expanded during this period, it created more export opportunities for producers in the United States. Those benefits were not measured in this study. Related to Exercise 3.7. SOURCE: Based on David H. Autor, David Dom, and Gordon H. Hanson, "The China Syndrome: Local Labor Market Effects of Import Competition in the United States," American Economic Review 103(6) (2013), pp. 2121-2168. Available at: http://economics.mit.edu/faculty/dautor/papers/inequality, accessed March 2015.