Industrial Mix as a Factor in the Growth and Variability of States' Economies

We use annual employment data for the states and the United States from 1969 to 1985 to estimate trend rates of growth and deviations from trend for the state economies. We calculate measures of growth and variability for each state that are net of the effect of the state industrial mix interacting with the national industrial growth rates and variabilities. We find great variety in the macroeconomic behavior of the regional state economies, and we present evidence that the industrial mix of an economy is one factor that helps explain differences in net growth rates and variabilities across the states.