Structural booms: why the South grows

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.