Academic journal article Monthly Labor Review

Regional Effects of the Most Recent Recession

Academic journal article Monthly Labor Review

Regional Effects of the Most Recent Recession

Article excerpt

What are the likely long-term economic effects of the most recent recession on the Nation's regions? In "How the Crash Will Reshape America" (Atlantic Monthly, March 2009), University of Toronto business professor and urban theorist Richard Florida offers some interesting and well-reasoned speculations in answer to that question. Professor Florida analyzes economic and demographic trends in the major regions of the United States and argues that in the long run, geographic location is still of primary importance to economic growth. For various reasons, which the author attempts to explain, some areas will be hit harder by the recession that began in 2007 than others. In addition, some areas are likely to recover more quickly than others--some will even be strengthened--while others might never fully recover.

Professor Florida begins with New York City, by most measures the world's largest financial center and the place where the financial crisis began. He makes the important point that, throughout modern history, "capitalist power centers" like New York have remained remarkably stable. Amsterdam was the leading financial center in the world from the 17th century to the early 19th century when it was displaced by London. Although the U.S. economy was larger than the British economy by 1900, New York did not surpass London to emerge as the world's largest financial center until after World War II. Because these centers tend to be densely populated urban areas, with high concentrations of educated professionals (financial specialists, accountants, lawyers, and so forth) from various industries, they are very difficult to duplicate elsewhere. …

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