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Recovery from the Great Recession: Explaining Differences Among the States

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  • Walden, Michael L.

Abstract

The recovery from the Great Recession has been slow compared to previous recoveries. However, at the state level the pace of improvement has varied considerably. This study in-vestigates the reasons for the variation in state economic recovery from the Great Recession by identifying determinants of two performance measures: growth in state real gross domestic product (GDP) and growth in state nonfarm payroll employment. The results showed that economic structure of the state matters; in particular, states with relatively larger GDP shares in agriculture, energy, financial services, and durable manufacturing (especially for motor ve-hicles and parts) had faster GDP growth, while concentrations in financial services and dura-ble manufacturing were associated with greater employment growth. States increasing indi-vidual income and corporate income taxes during the recession and recovery had slower GDP and job growth, while states increasing minor taxes and fees had a faster GDP recovery. Last-ly, states receiving more funds from the American Recovery Act experienced faster recoveries in both GDP and jobs.

Suggested Citation

  • Walden, Michael L., 2014. "Recovery from the Great Recession: Explaining Differences Among the States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 44(2).
    • Handle: RePEc:ags:jrapmc:243972
    DOI: 10.22004/ag.econ.243972
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    Cited by:

    1. Prescott, Peter & Gjerde, Kathy Paulson, 2022. "The Impact of State Fiscal Policy on States’ Resilience During the Great Recession," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 52(1), January.
    2. Zhenyu Gao & Michael Sockin & Wei Xiong, 2019. "Economic Consequences of Housing Speculation," NBER Working Papers 26457, National Bureau of Economic Research, Inc.
    3. Justin T. Callais & Jamie Bologna Pavlik, 2023. "Does economic freedom lighten the blow? Evidence from the great recession in the United States," Economics of Governance, Springer, vol. 24(3), pages 357-398, September.
    4. Sarasty, Oscar & Amin, Modhurima & Badruddoza, Syed, 2022. "Impact of the COVID-19 pandemic on agricultural commodity prices," 2022 Annual Meeting, July 31-August 2, Anaheim, California 322240, Agricultural and Applied Economics Association.
    5. Wall, Howard, 2023. "The Great, Greater, and Greatest Recessions of US States," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 53(1), January.

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