Economic Analysis Of Effects Of Business Cycles On The Economy Of Cities: Variations In Cyclical Employment
There are wide variations in the severity with which regions experience national recessions (Borts , Browne , Freidenberg and Bretzfelder , Gellner , Howland [1979,1981], SUQ and Rush (1975]). This paper presents and tests an econometric model to explain these cross-regional differences in cyclical behavior.
The model, based on export base theory, is tested with state-level data from the five post-World War II recessions between 1950 and 1975. The findings suggest that cross-state differences in the industry mix of exports, capital-labor ratios, age of manufacturing capital stocks, levels of unemployment insurance benefits, unionization of labor forces, and multiplier impacts on the residentiary sector of the economy explain cross-state differences in the severity of state recessions.
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