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A Model Of Micropolitan Area Sensitivity To The Business Cycle: Evidence From The Plains Region

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  • Bienvenido S. Cortes

Abstract

Past literature has examined the responsiveness of various economies (region, state, and metropolitan area) to changes in the U.S. business cycle. The objective of this study is to determine if spatial disaggregation to the small core city provides further insights to the co-movement of local area conditions to national business swings. Earlier studies have underscored the importance of examining the role of small cities and the factors which influence their sensitivity to the national cycle. This study focuses on another spatially disaggregated level: the micropolitan statistical area which consists of one or more counties with at least one city with more than 10,000 but less than 50,000 people. It focuses on 87 micropolitan statistical areas located in the seven states (Kansas, Iowa, Missouri, Minnesota, Nebraska, North Dakota, and South Dakota) of the Plains region. The study estimates and analyzes the correlations of annual percentage changes in various micropolitan area economic measures (total employment, nonfarm employment, Gross Regional Product, and personal income) with respect to changes in US real GDP over the 1969-2017 period. There are wide variations in business cycle sensitivity of micropolitan areas across-states, withinstates, and depending on the specific economic measure used.

Suggested Citation

  • Bienvenido S. Cortes, 2021. "A Model Of Micropolitan Area Sensitivity To The Business Cycle: Evidence From The Plains Region," The International Journal of Business and Finance Research, The Institute for Business and Finance Research, vol. 15(1), pages 61-76.
  • Handle: RePEc:ibf:ijbfre:v:15:y:2021:i:1:p:61-76
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    References listed on IDEAS

    as
    1. Owyang, Michael T. & Rapach, David E. & Wall, Howard J., 2009. "States and the business cycle," Journal of Urban Economics, Elsevier, vol. 65(2), pages 181-194, March.
    2. Carlino, Gerald A. & DeFina, Robert H. & Sill, Keith, 2001. "Sectoral Shocks and Metropolitan Employment Growth," Journal of Urban Economics, Elsevier, vol. 50(3), pages 396-417, November.
    3. Davidsson, Michael & Rickman, Dan S., 2011. "U.S. Micropolitan Area Growth: A Spatial Equilibrium Growth Analysis," The Review of Regional Studies, Southern Regional Science Association, vol. 41(2,3), pages 179-203, Fall, Win.
    4. David Bell & Mark Jayne, 2009. "Small Cities? Towards a Research Agenda," International Journal of Urban and Regional Research, Wiley Blackwell, vol. 33(3), pages 683-699, September.
    5. Shiqin Liu & Haifeng Qian & Kingsley E. Haynes, 2021. "Entrepreneurship in Small Cities: Evidence From U.S. Micropolitan Areas," Economic Development Quarterly, , vol. 35(1), pages 3-21, February.
    6. Davidsson, Michael & Cortes, Bienvenido, 2017. "The Role of the Housing Supply and the Regulatory Environment in Economic Growth of Micropolitan Statistical Areas," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 47(1).
    7. Gerald A. Carlino & Robert H. DeFina, 2003. "How strong is co-movement in employment over the business cycle? Evidence from state/industry data," Working Papers 03-5, Federal Reserve Bank of Philadelphia.
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    More about this item

    Keywords

    Micropolitan; Business Cycle; Sensitivity;
    All these keywords.

    JEL classification:

    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R12 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)

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