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The hollowing out process in the Chicago economy, 1975-2011

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Author Info
Geoffrey J.D. Hewings
Michael Sonis
Jiemin Guo
Philip R. Israilevich
Graham R. Schindler
Abstract

The metropolitan economy of Chicago has experienced a significant transformation in its economic structure over the past twenty years. Using a method for extraction of input–output tables that has been described elsewhere, it has been possible to produce an economic photograph of the Chicago region, annually, for the period 1975–2011. This paper explores the nature of these structural changes through examination of the changes in the composition of the Leontief multipliers and changes in the economic landscapes interpreted through application of the multiplier product matrix. The resulting picture, at the nine-sector level of detail, reveals a hollowing out process, with intra-metropolitan dependence replaced by dependence on sources of supply and demand outside the region. Furthermore, the analysis reveals a complex internal transformation, as dependence on locally sourced manufacturing inputs is replaced by dependence on local service activities.

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Paper provided by Federal Reserve Bank of Chicago in its series Assessing the Midwest Economy with number GL-7.

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Date of creation: 1996
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Handle: RePEc:fip:fedhas:gl-7

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Keywords: Chicago (Ill.);

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  1. Magnus Blomstrom, 1992. "Host Country Benefits of Foreign Investment," NBER Working Papers 3615, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  2. Robert E. Lipsey, 1993. "Foreign Direct Investment in the United States: Changes over Three Decades," NBER Chapters, in: Foreign Direct Investment, pages 113-172 National Bureau of Economic Research, Inc. [Downloadable!]
  3. Kokko, Ari & Blomstrom, Magnus, 1995. "Policies to encourage inflows of technology through foreign multinationals," World Development, Elsevier, vol. 23(3), pages 459-468, March. [Downloadable!] (restricted)
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  4. Alenka S. Giese, 1989. "The Opening of Midwest manufacturing to foreign companies: the influx of foreign direct investment," Working Paper Series, Regional Economic Issues 1989-5, Federal Reserve Bank of Chicago.
  5. Riad A Ajami & David A Ricks, 1981. "Motives of Non-American Firms Investing in the United States," Journal of International Business Studies, Palgrave Macmillan Journals, vol. 12(3), pages 25-34, September. [Downloadable!] (restricted)
  6. Li, Jiatao & Guisinger, Stephen, 1991. "How well do foreign firms compete in the United States?," Business Horizons, Elsevier, vol. 34(6), pages 49-53. [Downloadable!] (restricted)
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