Premium
Fluctuations and Downturns in a “Company Town”
Author(s) -
RUSHEN STEVEN F.
Publication year - 1995
Publication title -
growth and change
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.657
H-Index - 55
eISSN - 1468-2257
pISSN - 0017-4815
DOI - 10.1111/j.1468-2257.1995.tb00187.x
Subject(s) - metropolitan area , automotive industry , population , dependency (uml) , economic geography , economic base analysis , business , economy , geography , economics , engineering , demography , archaeology , systems engineering , aerospace engineering , sociology , microeconomics
A semi‐structural VAR time‐series model was used to examine movements in Flint Metropolitan Statistical Area (MSA) employment levels and determine how area employment was affected by movements in different sectors of the U.S. economy. Flint was chosen because in 1958 over 50 percent of the area's population was employed by the transportation industry, the majority in automobile production, and therefore Flint should be considered as a company town prototype for this modeling technique. Due to the dependency of this area's employment base on the automotive industry and the highly volatile nature of area employment levels, the Choleski decomposition was used instead of the structural Bernanke method. It was found that the effects of movements in the automotive industry were a major impact on aggregate area employment as well as on virtually all manufacturing sectors. These results are more robust than those for the Detroit Metropolitan Statistical Area (PSA) 1 . This is due primarily to Flint's greater degree of area dependency on the automotive‐industry.