Exploring the Economic Resilience in the United States Through State GDP Output
Abstract
Economic resilience is a rising topic in the field of economics. Although there is no standard definition, most literature suggests that the concept of regional economic resilience converged to encapsulate a region’s ability to resist, recover from, and restructure itself after an economic or environmental shock. There are a multitude of methods in the literature used to measure economic resilience. All of these methods utilize either GDP, employment, or a combination of both. While both GDP and employment cycles are powerful tools for measuring the impact of a recession on an economy, they measure vastly different things and neither fully captures economic wellbeing. This work uses a lagged fixed-effect regression model to examine the recovery of both Employment and GDP from the 2008/2009 recession. By including economic, socio-economic, and industrial measures in the model we are able to show which impact resilience in terms of employment and output. With a strengthened understanding of a region’s ability to withstand and recover from economic shocks, policy makers can better prepare for future recessions.