Economic Shock, Vulnerability and Resilience: Some Evidence from Performance of the Western United States

Abstract

Starting with the events surrounding September 11, 2001 and since the real estate market-led recession starting in 2008, interest in how countries, regions, and metropolitan cities respond to economic shocks has assumed prominence among researchers and policy makers. However, there is little work on how rural regions respond to, or manage such shocks. In this thesis, I argue and show that the effects of economic shock on different rural counties in the Western United States is different because of their differences in degrees of economic vulnerability and resilience. In order to show this, I estimate the degrees of economic vulnerability and resilience of 225 rural counties in the Western United States, and estimate empirical relationships between them and both the level and change in their unemployment rates in the period 2007-2010. The results strongly support my hypothesis, which is that rural counties can overcome unexpected economic shocks by investing in resilience enhancing programs and policies.