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Structural booms: why the South grows


  • Thomas J. Cunningham


Since the end of the 1991 recession, almost 27 percent of all new jobs in the United States have been created in the six southeastern states that make up the Sixth Federal Reserve District. What accounts for this strong relative economic performance in the region? ; This article examines the forces behind the South's economic strength and looks ahead at the course of its economic development in terms of three alternative approaches--the industrial base, the convergence, and the structuralist models. In evaluating the models' usefulness for thinking about why regions grow, the author finds the structuralist approach, which provides a general equilibrium model for understanding capital flows, interest rates, assets, goods, and labor market behavior, to hold the most promise as a perspective on long-term trends because it addresses the root causes of differential growth rates. This approach suggests a number of reasons for the Southeast's relatively rapid recent growth, which, taken together, give evidence of economic and social structures that may attract both employers and employees to the region at a disproportionate rate for some time to come.

Suggested Citation

  • Thomas J. Cunningham, 1995. "Structural booms: why the South grows," Economic Review, Federal Reserve Bank of Atlanta, issue May, pages 1-10.
  • Handle: RePEc:fip:fedaer:y:1995:i:may:p:1-10:n:v.80no.3

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    References listed on IDEAS

    1. Loretta J. Mester, 1987. "Efficient production of financial services: scale and scope economies," Business Review, Federal Reserve Bank of Philadelphia, issue Jan, pages 15-25.
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    3. Ferrier, Gary D. & Lovell, C. A. Knox, 1990. "Measuring cost efficiency in banking : Econometric and linear programming evidence," Journal of Econometrics, Elsevier, vol. 46(1-2), pages 229-245.
    4. Hunter, William C & Timme, Stephen G & Yang, Won Keun, 1990. "An Examination of Cost Subadditivity and Multiproduct Production in Large U.S. Banks," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 22(4), pages 504-525, November.
    5. Douglas D. Evanoff & Philip R. Israilevich, 1991. "Scale elasticity and efficiency for U.S. banks," Working Paper Series, Issues in Financial Regulation 91-15, Federal Reserve Bank of Chicago.
    6. David B. Humphrey, 1990. "Why do estimates of bank scale economies differ?," Economic Review, Federal Reserve Bank of Richmond, issue Sep, pages 38-50.
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