Understanding Patterns in U.S. Regional Economic Growth

KEY TAKEAWAYS * Differences in productivity growth and shifting preferences for amenities-primarily due to changing technology and rising incomes-have generated variations in U.S. regional economic growth. * A decline in manufacturing's relative economic importance, the IT boom and demand for amenities have helped drive faster productivity growth in higher-income coastal areas of the U.S. * Land use restrictions can raise housing prices and the cost of living, preventing people-especially lower-skilled workers-from moving to areas with better economic opportunities. [...]the rapid expansion of the information technology sector spurred faster growth in many U.S. coastal areas, while many inland regions languished. [...]manufacturing will continue to be important to the Midwest's economy, and manufacturing's share of GDP will probably continue to shrink. Thomas Walstrum Thomas Walstrum is a senior business economist in the economic research department at the Federal Reserve Bank of Chicago. 1.