Economic Policy Review
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Volume 3, Number 1 February 1997

The Metropolitan Economy in the National and World Arenas
Proceedings of a Conference Held at the Federal Reserve Bank of New York in November 1996

Download full bookPDF130 pages / 638 kb
Introduction to this IssuePDF2 pages / 19 kb
Charles Steindel
Opening RemarksPDF2 pages / 15 kb
William J. McDonough
Session 1: Overview of the Region's Performance

National and Regional Factors in the New York Metropolitan Economy
PDF16 pages / 116 kb
Jonathan McCarthy and Charles Steindel

The connections between broad economic indicators in the metropolitan region and their national counterparts are examined by the authors. The authors show that over the last seven years, employment growth has been poor in both absolute terms and relative to the nation, possibly indicating a region in decline. However, they note that the region's income growth has been considerably better than its employment growth, suggesting a region whose goods and services remain in healthy demand.
Sources of New York Employment FluctuationsPDF15 pages / 161 kb
Kenneth N. Kuttner and Argia M. Sbordone

The authors analyze employment growth in the metropolitan region and its relationship to employment in the United States as a whole. They identify a strong cyclical link between the region and the nation, punctuated by occasional, persistent shifts in the region's underlying growth rate. Some shifts are found to be related to industry factors, such as the restructuring of financial services in the late 1980s. However, the authors attribute a large and increasing share of New York employment fluctuations to region-specific factors.
CommentaryPDF4 pages / 15 kb
Henry J. Raimondo
CommentaryPDF6 pages / 34 kb
Todd E. Clark
Summary of Floor DiscussionPDF2 pages / 15 kb
Jason Bram and Sydney Ludvigson
Session 2: The Industrial Context

The Performance of Metropolitan Area Industries
PDF12 pages / 74 kb
Matthew P. Drennan

In the New York metropolitan region, job losses have been more severe and economic recovery slower than in most other metropolitan areas. But a more interesting, and less pessimistic, story is revealed by regional income: an analysis of aggregate earnings shows that incomes in the region are higher now, in real terms, than they were in 1988. That rise, the author contends, reflects increased productivity and a potential shift in industry composition from less productive to more productive industries.
Industrial Restructuring in the New York Metropolitan AreaPDF14 pages / 95 kb
James Orr

The author analyzes the industrial restructuring process in the New York metropolitan area in the first half of the 1990s. To measure the extent of restructuring, he reviews estimates of permanent job losses of metropolitan workers, mass layoff announcements in the region, and net job changes by industry. The analysis shows that a significant part of the area's recent restructuring reflects a continuation of the long-term trend away from manufacturing toward a service-oriented economy. This shift, while broadly in line with nationwide trends, has been somewhat more intense in the metropolitan area. Downsizings also hit a number of the area's nonmanufacturing sectors, including government, transportation, and public utilities.
Presentations on the Performance of Four Industries:
Banking, Business Services, Securities, and Manufacturing
Potential Employment Effects of the Restructuring of Retail BankingPDF4 pages / 23 kb
Lawrence J. Radecki

The author explains that two steps being taken by banks to restructure their branch systems—the substitution of supermarket branches for traditional offices and the expansion of telephone banking through twenty-four-hour phone centers—may adversely affect employment in NewYork State as well as across the country.
Business Services and the Economic Performance of the New York Metropolitan Region
PDF4 pages / 22 kb
Thierry Noyelle

Business services, according to the author, will continue to contribute positively to employment and to earnings growth in the metropolitan region in the years ahead—assuming no cyclical downturn looms on the horizon.
The Securities Industry and the New York-New Jersey RegionPDF4 pages / 35 kb
Richard Cantor

The author finds that the securities industry in the New York–New Jersey region, while vulnerable to stock and bond market fluctuations, is enjoying strong growth in employment and salaries. Benefits from future growth, however, will likely flow predominantly to highly skilled workers as rapid technological change continues to widen existing income differentials.
Technological Trends Affecting the Manufacturing Sector of New York CityPDF4 pages / 21 kb
Mitchell L. Moss

The author concludes that manufacturing is still a vital part of New York City's economy, despite substantial job losses in this sector over the past two decades. An influx of skilled immigrants, the use of advanced technologies in production processes, and the ability to respond rapidly to global markets give New York City a strong future in manufacturing high-value goods.
Summary of Floor DiscussionPDF2 pages / 16 kb
Carol Rapaport and Joseph S. Tracy
Session 3: Looking to the Future

The Outlook for the Metropolitan Area
PDF19 pages / 101 kb
Dick Netzer

The author assesses the region's future and identifies policies that might improve the local outlook. He acknowledges that substantial cuts in the local tax burden could increase growth but doubts whether local governments could afford such widespread reductions. Instead, he argues, it would be more beneficial for authorities to seek ways to lower the cost of doing business in the region, possibly by reducing taxes levied on intermediate goods and services purchased by businesses.
Summary of Floor DiscussionPDF2 pages / 14 kb
Barbara Walter and Richard Peach
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