SUBURBAN MUNICIPAL EXPENDITURES: THE EFFECTS OF BUSINESS ACTIVITY,FUNCTIONAL RESPONSIBILITY AND REGIONAL CONTEXT*

A wide variety of models exist seeking to explain variation in the level of suburban government activity. Alternative models stress concepts of local stratification and discrimination, the structure of local decision-making, ecological position, and public choice, each of which suggests varying hypotheses about which suburbs spend more and which less. In this paper we summarize and evaluate the relative strength of each of these alternative models, and propose major directions for future research.     

SERVICE NEEDS AND MUNICIPAL EXPENDITURES*

The difficulties involved in assessing the meaning of municipal expenditures are examined in view of the fact that dependency upon municipal services varies among and within jurisdictions. A cross-sectional analysis of spending in the five largest cities in Connecticut illustrates how considerations of human needs can affect the interpretation of spending (although they do not alter legal obligations or the financial reality of fiscal conditions). The possibilities and limitations associated with this approach to municipal expenditures are conveyed in terms of questions of public policy.     

THE DETERMINANTS OF 1963–77 REGIONAL MANUFACTURING GROWTH: WHY THE SOUTH AND WEST GROW*

ABSTRACT. This paper analyzes 1963–77 manufacturing employment growth in the 48 contiguous states. Six factors jointly explain 96 percent of the variance. Markets explains 55 percent; climate, 15 percent; a rural state attraction, 11 percent; unionization, 6 percent; thresholds, 5 percent; and amenities, 4 percent. Resources, taxes, and business climate lack significance. Sunbelt-Frostbelt is a false dichotomy: the Northwest grew as fast as the South. The real contrast–largely caused by markets–is between growth rates of 6 percent in the Manufacturing Belt, 35 percent in its bordering Transition Zone, and 58 percent in the combined South and West.     

TECHNICAL CHANGE AND PROFITS IN CANADIAN MANUFACTURING: A REGIONAL ANALYSIS

Manufacturing profitability and growth declined sharply in Canada between 1955 and 1984. The spatial extent of this decline has not previously been documented. This article examines manufacturing performance in six regions of Canada. The analysis reveals significant interregional performance differences that appear to be increasing. Two different types of inter-firm competition are identified in the article: competition in production and competition in the market. Empirical investigation reveals that changes in production conditions had a greater impact on regional profitability in five of the six regions studied. In the remaining region, poor market performance was the primary cause of the reduction in profits after 1955.
Au Canada la rentabilité et la croissance industrielle ont profondément diminué entre les années 1955 et 1984. L'ampleur spatiale de cette baisse n'a jamais été docu-mentée. Cette étude examine le comportement et les performances de fabrication dans six régions canadien-nes. De considérables différences inter-régionales, qui semblent toujours s'accentuer sont mises en évidence. Dans cette recherche, deux genres de concurrence entre les societes son identifiés: la concurrence dans la production, et la concurrence dans le marché. L'analyse empi-rique montre que certains changements dans les conditions de production ont eu un effet considérable sur la rentabilité régionale pour cinq des six régions en question. En ce qui concerne la dernière région, la baisse des profits a partir de 1955 est dûe essentiellement à la mauvaise performance du marché.     

AGGLOMERATION AND REGIONAL COSTS OF LIVING*

ABSTRACT Standard models of the new economic geography predict that costs of living are lower in the core than in the periphery. But in reality they tend to be higher in agglomeration areas, mainly because of regional differences in housing costs. In this paper, we add a home goods sector to the seminal NEG model of Krugman (1991) . We show that a core–periphery structure can endogenously emerge in which the core is the more expensive area. This result has an important normative implication. Since higher costs of living imply falling real wages if there is no nominal wage premium, it is not desirable for everybody to live in the core region.     

REGIONAL INDUSTRIAL STRUCTURE AND ECONOMIC GROWTH AND INSTABILITY*

ABSTRACT. National and regional employment patterns are subject to growth-instability tradeoffs. This paper applies the portfolio selection model to detailed employment data for the U.S. economy and selected states. Empirical results indicate that growth-instability trade-offs exist in a form not previously understood. The paper also identifies growth and stabilization potential by identifying stabilizing sectors.     

PATTERNS AND DETERMINANTS OF PRODUCTIVE EFFICIENCY IN STATE MANUFACTURING*

ABSTRACT This paper uses a stochastic frontier production-function model to measure and compare productivity efficiency in the manufacturing sector of states in the United States over the period 1959–1972. Based on this model we find considerable variations in productive efficiency across states. A large portion of the variation is found to be related to regional differences in labor-force characteristics, levels of urbanization and industrial structure. We also examine the relationship between productive efficiency and the subsequent growth of manufacturing and find some evidence of a weak relationship between efficiency and the growth of employment.     

LONG-TERM FORECASTING OF NONCOINTEGRATED AND COINTEGRATED REGIONAL AND NATIONAL MODELS*

ABSTRACT. Johansen's (1988) multivariate test for cointegration is first applied to four models involving quarterly state data and five variables, along with a national model based on Friedman and Kuttner's (1992) model of money demand, which uses three variables. Each regional model consists of frequently used national and state series, for which theory suggests the possible cointegration of several series pairs. Beginning with all five series, however, one state model is found to be cointegrated over each of 20 successive estimation intervals. The money demand model and one state model are not cointegrated over the same intervals. In the cointegrated case, five-year experimental forecasts show that error correction mechanism (ECM) and Bayesian ECM models outperform all other approaches. More importantly, forecasting performance improves further by respecifying the ECM model based on three cointegrated series pairs rather than the five-component cointegrating vector. For the two noncointegrated systems, the first-difference model suggested by the cointegration/ error correction literature is far superior to VAR in levels over both shortand long-term horizons.     

THE EFFECTS OF TAXES,EXPENDITURES, AND PUBLIC INFRASTRUCTURE ON METROPOLITAN AREA EMPLOYMENT*

ABSTRACT. Data for 28 metropolitan areas over a 15-year period are used to determine the impacts of government spending, taxes, and public infrastructure on total employment and disaggregated employment. After carefully controlling for the government budget constraint we find that taxes are negatively related to total employment and education spending is positively related to total employment. Nevertheless, we find that it is difficult for metropolitan areas to influence the composition of their employment with government tax and expenditure policies. Moreover, at current levels of public infrastructure, marginal changes in infrastructure have no strong effect on employment.