SENSITIVITY OF GROSS STATE PRODUCT TO CYCLICAL AND STRUCTURAL CHANGE

The sensitivity of regional industry to business cycles has been widely documented. Responses of individual businesses and industries in a specific region or state to each phase of the business cycle has been less well analyzed and understood. Lacking in all the documentation, moreover, is reference to the impact of business cycles on interregional trade and regional interindustry structure and to the separation of these impacts from those due to business activity location and dislocation. To deal with these limitations, state-level location quotient and shift-share analyses of year-to-year changes in industry-specific contribution to gross state product are used in differentiating the varying degrees of cyclical sensitivity among industries and regions and then, in later studies, to account for these differences in parallel analyses of the structure of inter-regional trade and interindustry transactions among selected groups of states. A micro-to-macro analytical framework is offered, finally, for testing working hypotheses pertaining to the sensitivity of businesses, industries and regions to the business cycle and to structural dislocation.