Something completely different: in early October the Boston Fed is holding a conference on regional divergence, my old stamping ground. I'm not presenting research; I'm just the lunchtime entertainment 1/ bostonfed.org/housedivided20…
But I have been thinking about the subject a fair bit lately, and thought I would write up some of those thoughts (sorry about the roughness of this draft, but I wanted to get it out there) 2/ gc.cuny.edu/CUNY_GC/media/…
I offer three main arguments/insights. First, our theories of regional economic dynamics suggest that there will be occasional "tipping points" when convergence flips into divergence or vice versa. And circa 1980 we seem to have flipped into divergence 3/
This is actually the third such tipping point in US history: divergence from the mid-19th to early 20th centuries, then convergence to 1980 or so, and now divergence again. This is a fundamental change in dynamics, probably associated with the knowledge economy 4/
And it's not just money. Places like KY and WV had the same life expectancy as NY as recently as 1990; now they're 5 years below. Social problems are festering in lagging regions — and divergence is feeding political polarization 5/
But if you want to stop the process, you should be aware that thanks to our transfer union lagging regions already receive huge de facto aid, as much as 20% of GDP. Nevertheless, divergence continues 6/
