The Economic Resilience of U.S. Counties during the Great Recession

Yicheol Han,Stephan J Goetz

doi:10.52324/001c.8059

Abstract

A regional economy perturbed by a shock may move onto a new growth path by reestablishing economic linkages both internally and with other regions. This dynamic property of regions has recently been explained in terms of regional economic resilience. In this paper, we introduce a more refined measure of economic resilience and then apply it to monthly employment data for U.S. counties in the 2007-2009 downturn. We suggest that describing and analyzing the distinct response patterns during this downturn are important starting points for policy makers to understand the spatial resilience of the US economy.

Highlights

The terror attacks of September 11, 2001, Hurricane Katrina in 2005, the Great Recession of 2007-2009, and long-term economic decline in the Great Lakes region, among other disturbances, have focused policy makers’ attentions on the ability of regional economies to continue business operations during such shocks and disasters, and to recover from them
Regional economic resilience can be measured by the response to a shock both in the aggregate economy and in the sub-national units that make up the aggregate national economy
A regional economy perturbed by a shock may establish a new growth path; this represents the “action and reaction” of an economic system

Summary

Introduction

The terror attacks of September 11, 2001, Hurricane Katrina in 2005, the Great Recession of 2007-2009, and long-term economic decline in the Great Lakes region, among other disturbances, have focused policy makers’ attentions on the ability of regional economies to continue business operations during such shocks and disasters, and to recover from them. A shock that occurs within a local area can spread through an entire economy because of the interrelationships that exist between economic agents and regions. In this process, each region responds in unique ways to a shock, reflecting its particular spatial and industrial structures. A regional economy is defined as a system of interrelated components within a given environment This perspective seeks to understand a system’s response to shocks by modeling the interrelationships between components of both the broader system and of each individual component. Regional economic resilience can be measured by the response to a shock both in the aggregate economy and in the sub-national units (such as states or counties) that make up the aggregate national economy. Existing studies have focused only on the resilience of larger economic units and, more importantly, they do not provide a specially designed quantitative index for measuring resilience

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Conclusion