The determinants of county growth

The determinants of population and employment growth were explored from a broader interregional (as opposed to intraregional) perspective. Data for the 1970s, at the county level of disaggregation, were used to analyze the effects of economic, demographic, and climatic variables on population and employment growth in a simultaneous equation framework. The use of data from the more than 3000 US counties provides a considerably larger testing ground than those used in previous research. The point of departure was a conventional, general equilibrium model in which both households and producers are geographically mobile. The study's dependent variables refer to population, total, and manufacturing employment densities. Family income had a powerful effect in stimulating both population and employment density. A 10% increase in family income led to a 7.9% increase in total and a 9.2% increase in manufacturing employment densities. High family income must stand for high demand, and thus, firms are drawn to an area. High family income also drew households to an area. A 10% increase in family income led to a 5.5% increase in population density. High family income must represent "good" neighborhoods for households. High family income was positively correlated with population and employment density, but in other recent studies either a negative and significant relationship or an insignificant relationship were reported. Local taxes consist of the receipts of county government and those of municipalities, townships, school districts, and special districts within the county. The elasticities reported in Table 4 suggest that a 10% increase in such taxes resulted in about a 0.072% reduction in county population density during the decade. The Industrial Revenue Bonds (IRBs) and the percent of the labor force that is unionized are 2 potential policy instruments at the state level. The study results suggest that IRBs have not stimulated either manufacturing or total employment, and the coefficients were statistically insignificant in the structural equations. The elasticities imply that a 10% increase in percent union reduces total employment by 0.42% and manufacturing employment by 0.18%. The effect on population was tiny. Further, while not intended, the interstate highway program may have been a significant redistributor of population and employment but has not caused immigration of people and jobs from central cities.     

Employment Deconcentration: A New Perspective on America's Postwar Urban Evolution

In this study we show that during the postwar era the United States experienced a decline in the share of urban employment accounted for by the relatively dense metropolitan areas and a corresponding rise in the share of relatively less dense ones. This trend, which we call employment deconcentration , is distinct from the other well–known regional trend, namely, the postwar movement of jobs and people from the frostbelt to the sunbelt. We also show that deconcentration has been accompanied by a similar trend within metropolitan areas, wherein employment share of the more dense sections of MSAs has declined and that of the less dense sections risen. We provide a general equilibrium model with density–driven congestion costs to suggest an explanation for employment deconcentration.     

CONVERGENCE AND THE U.S. STATES: A TIME-SERIES ANALYSIS*

ABSTRACT. After decades of apparent convergence, state and regional per capita earnings diverged between 1978 and 1988. A central tenet of the convergence hypothesis is that shocks to relative state and regional earnings, such as those of the 1978 to 1988 period, are transitory. We find evidence for convergence for the U.S. states and regions during the 1929 to 1990 period after allowing for a break in the rate at which the various states and regions were converging in 1946. An important finding of this research is that the US. states and regions achieved per capita earnings convergence by 1946.     

Beautiful city: Leisure amenities and urban growth

Modern urban economic theory and policymakers are coming to see the provision of consumer‐leisure amenities as a way to attract population, especially the highly skilled and their employers. However, past studies have arguably only provided indirect evidence of the importance of leisure amenities for urban development. In this paper, we propose and validate the number of tourist trips and the number of crowdsourced picturesque locations as measures of consumer revealed preferences for local lifestyle amenities. Urban population growth in the 1990–2010 period was about 10% points (about one standard deviation) higher in a metro area that was perceived as twice more picturesque. This measure ties with low taxes as the most important predictor of urban population growth. “Beautiful cities” disproportionally attracted highly educated individuals and experienced faster housing price appreciation, especially in supply‐inelastic markets. In contrast to the generally declining trend of the American central city, neighborhoods that were close to central recreational districts have experienced economic growth, although at the cost of minority displacement.     

The Differential Regional Effects of Monetary Policy: Evidence from the U.S. States

In this paper we use time-series techniques to examine whether monetary policy had symmetric effects across U.S. states during the 1958:1–1992:4 period. Impulse response functions from estimated structural vector autoregression models reveal differences in policy responses, which in some cases are substantial. We provide evidence on the reasons for the measured cross-state differential policy responses. The size of a state's response is significantly related to industry-mix variables, providing evidence of an interest rate channel for monetary policy, although the state-level data offer no support for recently advanced credit-channel theories.