Recession and Recovery across the Nation: Lessons from History

By Wilkerson, Chad R. | Economic Review (Kansas City, MO), Spring 2009 | Go to article overview

Recession and Recovery across the Nation: Lessons from History


Wilkerson, Chad R., Economic Review (Kansas City, MO)


The U.S. economy officially fell into recession in December 2007, but the timing of the downturn varied widely across regions of the country. In some regions, employment began to erode much earlier in 2007, while in other regions economic activity stayed strong well into the second half of 2008. Do regions typically vary this much in the timing and circumstances of their recessions? If so, perhaps past experience can also shed light on whether some regions can be expected to rebound earlier or stronger than others from this recession.

To explore these possibilities, this article looks at job growth trends across the 12 districts of the Federal Reserve System in recent business cycles. The article finds that the timing and depth of regional recessions typically vary widely, with several districts regularly outperforming others. The same generally holds true for the timing and strength of economic recoveries and expansions across the country. Some of these differences can be explained by the unique industrial structures of the districts, but other factors also play a role.

Depending on the district, the current recession has both similarities and differences with past recessions. Supplemented with other economic theory and analysis, these past experiences may provide some guide to the future regional pattern of recovery.

[FIGURE 1 OMITTED]

The first section of the article examines the timing of entry to the current recession by the Federal Reserve districts, as well as the wide range of job growth across districts since the 2001 recession. The second section compares this recent experience with U.S. business cycles over the past 50 years. The third section describes how historical trends and economic theory can contribute to understanding the future path of regional economic growth.

I. THE TIMING AND CIRCUMSTANCES OF THE CURRENT RECESSION

The current U.S. recession ended a period of national economic expansion that officially started in late 2001. Since then, employment growth in the 12 Federal Reserve districts has varied considerably--both during the recovery and after the current recession began (Figure 1).

When did the current recession begin in each district?

The nation's arbiter of business cycle dating--the National Bureau of Economic Research (NBER)---considers trends in a number of economic indicators in declaring the start and end dates of recessions. These include employment, industrial production, sales, and real income. (1) Based on the NBER's analysis of this combination of data, it determined that the U.S. economy entered recession in December 2007.

[GRAPHIC 1 OMITTED]

To analyze the timing and depth of recessions across Federal Reserve districts over long periods, slightly different measures are necessary than those used by NBER. In this article, quarterly employment data are used to identify regional business cycle peaks and troughs. (2) Based on this measure, the U.S. economy entered the current recession in the first quarter of 2008.

By the first quarter of 2009, all 12 Federal Reserve districts had entered the current recession (Chart 1). (3) The Atlanta District was the first district to experience a downturn, with employment beginning to decline in the second quarter of 2007. The Cleveland and Chicago districts also entered early. Only two districts entered the recession in the same quarter as the nation, with five others joining in the following quarter. The Kansas City and Dallas districts entered last.

[GRAPHIC 2 OMITTED]

How has job growth varied across districts in recent years?

Differences in overall job growth by the 12 districts have also been sizable during the recent economic expansion. While employment in several districts never returned to its pre-2001 recession level, jobs in other districts grew fairly rapidly.

District employment gains during the recovery ranged from less than 1 percent in the Cleveland District to nearly 14 percent in the Dallas District (Chart 2). …

The rest of this article is only available to active members of Questia

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
One moment ...
Default project is now your active project.
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

(Einhorn, 1992, p. 25)

(Einhorn 25)

(Einhorn 25)

1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

Note: primary sources have slightly different requirements for citation. Please see these guidelines for more information.

Cited article

Recession and Recovery across the Nation: Lessons from History
Settings

Settings

Typeface
Text size Smaller Larger Reset View mode
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

Help
Full screen
Items saved from this article
  • Highlights & Notes
  • Citations
Some of your highlights are legacy items.

Highlights saved before July 30, 2012 will not be displayed on their respective source pages.

You can easily re-create the highlights by opening the book page or article, selecting the text, and clicking “Highlight.”

matching results for page

    Questia reader help

    How to highlight and cite specific passages

    1. Click or tap the first word you want to select.
    2. Click or tap the last word you want to select, and you’ll see everything in between get selected.
    3. You’ll then get a menu of options like creating a highlight or a citation from that passage of text.

    OK, got it!

    Cited passage

    Style
    Citations are available only to our active members.
    Buy instant access to cite pages or passages in MLA 8, MLA 7, APA and Chicago citation styles.

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn, 1992, p. 25).

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences." (Einhorn 25)

    "Portraying himself as an honest, ordinary person helped Lincoln identify with his audiences."1

    1. Lois J. Einhorn, Abraham Lincoln, the Orator: Penetrating the Lincoln Legend (Westport, CT: Greenwood Press, 1992), 25, http://www.questia.com/read/27419298.

    Cited passage

    Thanks for trying Questia!

    Please continue trying out our research tools, but please note, full functionality is available only to our active members.

    Your work will be lost once you leave this Web page.

    Buy instant access to save your work.

    Already a member? Log in now.

    Search by... Author
    Show... All Results Primary Sources Peer-reviewed

    Oops!

    An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.