For the past 11 years, sales of light vehicles have consistently been above 15 million units per year, representing an unusually strong run for this industry. Toward the end of 2007, the U.S. market for motor vehicles started to slow down. As the price for gasoline kept rising, recently reaching $4 a gallon, not only did vehicle sales continue to fall, but consumers rather quickly adjuste... Read More

As water levels recede, the region is beginning to take stock of impact from some its worst flooding since 1993. The geographic footprint of this year's flooding (depicted below) is less extensive than the nine states and 504 counties affected 15 years ago. And as always, an assessment of the short- and long-term impact of this natural disaster on the national and regional economy will be... Read More

Few outside the state of Michigan are fully aware of its economic woes. Nationally, the U.S. economic slowdown, housing market decline, and rising gasoline prices have captured the headlines. Even within the Midwest, spring and early summer flooding have dominated our news. Somewhat lost in the shuffle, Michigan payroll jobs are down more than 10% from their peak in June, 2000, representing o... Read More

Across the Midwest, perhaps no economic development issue looms as large as the diminishing role of manufacturing. The Midwest's once rapid population growth and lofty standard of living largely evolved from the industrialization that took place over the past 150 years. Yet, in recent years, job levels in manufacturing have declined. And as a share of overall payroll employment in the region,... Read More

For nations, gross domestic product (GDP) is the most widely used yardstick to measure economic activity and growth. Conceptually, GDP measures the value of output produced by the market economy within a year or other period. In addition, GDP is defined as output produced within a designated geographic area such as a nation's boundaries. There is one more major wrinkle in this mea... Read More

There is a greater concentration in manufacturing among the five states of the Seventh Federal Reserve District than in the nation. For example, as measured by the share of payroll jobs in manufacturing, Indiana ranked first among the 50 states in 2007; Wisconsin, second; Iowa, fourth; Michigan, seventh; and Illinois, 19th. For this reason, we at the Federal Reserve Bank of Chicago tend t... Read More

Americans sometimes harbor mixed feelings about investment in enterprises on U.S. soil that are owned and directed by companies domiciled abroad. Yet for the most part, investment from overseas represents a validation of the productive business climate in the domestic economy. Here, our system of law and contracts, along with productive workers and well-conceived public infrastructure, of... Read More

Two fine studies have been released this year that can guide the slow-growing Midwest in finding its “way forward.” At a time when national sentiment has been running high to tighten national borders between the U.S. and other nations, both reports strongly argue for lowering restrictions on nearby borders—namely those between Midwest states and between the U.S. and Canada along the Great Lak... Read More

It has become almost hackneyed to proclaim that we live in a knowledge economy driven by innovation. The mantra of current economic development gurus is that the race goes to the smartest and the swiftest. Yet, despite this popular consensus that innovation may be the key factor in determining future growth in the economy, we actually know very little about how to measure innovation and what ... Read More

What role does migration play in helping regions such as Southeast Michigan adjust to profound economic shocks? For the most part, out-migration is not usually the favored choice of families who have strong social and economic ties to their communities and region. Regions under duress first look to rebuild and reinvent their local economy. But Americans are also a nomadic people. And so, hous... Read More