BEA Releases New Numbers on Metropolitan Gross Domestic Product (GDP)

From the BEA's press release:

According to these prototype estimates, in 2005, real GDP by metropolitan area grew in 327 of the 363 metropolitan areas. Growth in real GDP by metropolitan area in 2005 was strong along the western and southern coasts (Chart 1). Growth was particularly robust and widespread in the metropolitan areas located in Florida. In contrast, the metropolitan areas near the Great Lakes did not perform as well.

Perspective on GDP by Metropolitan Area for 2005

• Current-dollar GDP for the Nation was $12.4 trillion; it was $1.6 trillion for California, the largest state
• In comparison, in the New York metropolitan area it was $1.1 trillion
• Metropolitan areas produced 90 percent of U.S. current-dollar GDP; the five largest metropolitan areas accounted for 23 percent of the U.S. total
• The smallest 75 metropolitan areas accounted for less than two percent of U.S. GDP
• When ranked by current-dollar GDP, the New York metropolitan area would rank second among states and 10th among countries in 2005.

There are many ways to measure "prosperity" and GDP is certainly among the most common.  We've been waiting for these numbers to become available.  But, now the question is not which regions are growing the fastest (GDP is obviously increasing with population and firm growth), but which regions are the most productive (GDP per person) and what is happening to productivity growth?  What other questions should we start looking at now that this data is available??

posted by Kevin Stolarick

New Explanation of Industrial Revolution

 

Dr. Gregory Clark has a new book "A Farewell to Alms" that offers a unique and very interesting explanation of the underlying causes and consequences of the industrial revolution.

The New York Times has a discussion about the book:

Gregory Clark, an economic historian at the University of California, Davis, believes that the Industrial Revolution — the surge in economic growth that occurred first in England around 1800 — occurred because of a change in the nature of the human population. The change was one in which people gradually developed the strange new behaviors required to make a modern economy work. The middle-class values of nonviolence, literacy, long working hours and a willingness to save emerged only recently in human history, Dr. Clark argues.

Generation after generation, the rich had more surviving children than the poor, his research showed. That meant there must have been constant downward social mobility as the poor failed to reproduce themselves and the progeny of the rich took over their occupations. “The modern population of the English is largely descended from the economic upper classes of the Middle Ages,” he concluded.

As the progeny of the rich pervaded all levels of society, Dr. Clark considered, the behaviors that made for wealth could have spread with them. He has documented that several aspects of what might now be called middle-class values changed significantly from the days of hunter gatherer societies to 1800. Work hours increased, literacy and numeracy rose, and the level of interpersonal violence dropped.

Another significant change in behavior, Dr. Clark argues, was an increase in people’s preference for saving over instant consumption, which he sees reflected in the steady decline in interest rates from 1200 to 1800.

Dr. Clark says the middle-class values needed for productivity could have been transmitted either culturally or genetically. But in some passages, he seems to lean toward evolution as the explanation. “Through the long agrarian passage leading up to the Industrial Revolution, man was becoming biologically more adapted to the modern economic world,” he writes. And, “The triumph of capitalism in the modern world thus may lie as much in our genes as in ideology or rationality.”

Full story here.

What does this say about today's post-industrial economy?

posted by Kevin Stolarick

Another Reason to Live in a Big City

The New York Times reports on a recent study that found the "wage gender gap" hasn't just disappeared, it's switched direction in some big cities.

Young women in New York and several of the nation’s other largest cities who work full time have forged ahead of men in wages, according to an analysis of recent census data. The shift has occurred in New York since 2000 and even earlier in Los Angeles, Dallas and a few other cities.

The analysis was prepared by Andrew A. Beveridge, a demographer at Queens College, who first reported his findings in Gotham Gazette, published online by the Citizens Union Foundation. It shows that women of all educational levels from 21 to 30 living in New York City and working full time made 117 percent of men’s wages, and even more in Dallas, 120 percent. Nationwide, that group of women made much less: 89 percent of the average full-time pay for men.

Full story here

posted by Kevin Stolarick