IDEAS home Printed from
   My bibliography  Save this paper

Factors behind the convergence of economic performance across U.S. states


  • Keith R. Phillips
  • James Nordlund
  • Roberto Coronado


The rolling recessions of the 1970s and 1980s were characterized by industry and region specific shocks that led to large dispersions in the economic performance of regions across the U.S. The 1970s were primarily impacted by sharply rising energy prices that hit the manufacturing states hard while stimulating growth in the energy states.> ; The 1980s began with declines in the Farm Belt, followed by declines in the Energy Belt, the Rust (manufacturing) Belt, and finally, due to declines in defense spending, a decline in the Gun Belt. Simple measures of regional dispersion such as the population-weighted variance of job growth across states show that the economic dispersion was historically high during these two decades.> ; The 1990s saw a continuous decline in regional economic dispersion and the 2000s has seen historically low levels of dispersion. Perhaps the biggest surprise this decade has been the low levels of dispersion of economic performance over the past several years given the significant energy price shocks and the depth of the national economic recession. In this paper, we look at the likely causes of economic dispersion across regions and test for the major influences both in the rise of dispersion in the 1970s and 1980s and the subsequent fall in the 1990s and 2000s. Major factors that we test include state industrial structure, oil price shocks and bank integration.

Suggested Citation

  • Keith R. Phillips & James Nordlund & Roberto Coronado, 2011. "Factors behind the convergence of economic performance across U.S. states," Working Papers 1108, Federal Reserve Bank of Dallas.
  • Handle: RePEc:fip:feddwp:1108

    Download full text from publisher

    File URL:
    Download Restriction: no

    References listed on IDEAS

    1. Owyang, Michael T. & Piger, Jeremy & Wall, Howard J., 2008. "A state-level analysis of the Great Moderation," Regional Science and Urban Economics, Elsevier, vol. 38(6), pages 578-589, November.
    2. Donald Morgan & Bertrand Rime & Philip Strahan, 2003. "Bank Integration and State Business Cycles," NBER Working Papers 9704, National Bureau of Economic Research, Inc.
    3. Hamilton, James D., 2003. "What is an oil shock?," Journal of Econometrics, Elsevier, vol. 113(2), pages 363-398, April.
    4. Carlino, Gerald A. & DeFina, Robert H., 2004. "How strong is co-movement in employment over the business cycle? Evidence from state/sector data," Journal of Urban Economics, Elsevier, vol. 55(2), pages 298-315, March.
    5. Donald P. Morgan & Bertrand Rime & Philip E. Strahan, 2004. "Bank Integration and State Business Cycles," The Quarterly Journal of Economics, Oxford University Press, vol. 119(4), pages 1555-1584.
    6. William R. Keeton, 2009. "Has multi-market banking changed the response of small business lending to local economic shocks?," Economic Review, Federal Reserve Bank of Kansas City, issue Q I, pages 5-35.
    Full references (including those not matched with items on IDEAS)


    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.

    Cited by:

    1. Van den Heuvel Skander J., 2012. "Banking Conditions and the Effects of Monetary Policy: Evidence from U.S. States," The B.E. Journal of Macroeconomics, De Gruyter, vol. 12(2), pages 1-31, March.

    More about this item


    Regional economics ; Industries ; Economic development;

    NEP fields

    This paper has been announced in the following NEP Reports:


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:feddwp:1108. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Amy Chapman). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.