Economic Analysis of Effects of Business Cycles on the Economy of Cities

A severe recession in 1973 to 1975 followed by a weak expansion from 1975 to 1979 and another recession in 1979 through 1983 left many metropolitan areas with short falls in tax revenues and rising social costs. The effects of the weak national economy during this period were felt particularly severely in the central cities, which were already experiencing the stresses of secular declines in employment and the number of middle income residents. If the cyclical instability of the last decade is a forerunner of the remainder of the 1980s, it is clear that an understanding of central city and suburban economies requires a better understanding of the interaction between the business cycle and long run metropolitan growth. The purpose of this paper is to begin to fill this gap in our knowledge.In particular, this paper addresses the relationship between a metropolitan economy’s long run growth and its response to the national business cycle