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Economic Growth and Well-being in the Mountain Empire

Economic Growth and Well-being in the Mountain Empire. Bill Shobe Center for Economic & Policy Studies, U.Va. Wise Virginia, February 23, 2013. You heard it hear first…. Prosperity is not about money. Income Growth in SWVA .

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Economic Growth and Well-being in the Mountain Empire

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  1. Economic Growth and Well-being in the Mountain Empire Bill Shobe Center for Economic & Policy Studies, U.Va. Wise Virginia, February 23, 2013

  2. You heard it hear first… • Prosperity is not about money.

  3. Income Growth in SWVA Source: Bureau of Economic Analysis, Regional Economic Information System

  4. Income Growth: Another View Source: Bureau of Economic Analysis, Regional Economic Information System

  5. Income Growth: Sources Source: Bureau of Economic Analysis, Regional Economic Information System

  6. The Economy is Dynamic • Jobs and people move around (a lot).

  7. Unemployment Source: Virginia Employment Commission

  8. Employment by Sector

  9. Population Source: Virginia Employment Commission

  10. Development Conundrums • Higher productivity labor implies higher potential wages and more opportunities elsewhere • Higher wage jobs imply greater productivity, so fewer workers are needed • Increased economic activity implies higher costs (price of fixed assets) • Entrepreneurship increases with density

  11. What Contributes to Prosperity? • Human capital • Healthand education • Natural capital • Resources • Amenities • Social capital • Entrepreneurship • Effective and responsive government

  12. The Elephant in the Room • Coal has been a great natural advantage for the region • But has it also been a curse? • Has it limited diversification? • Has it reduced the focus on human capital and entrepreneurship?

  13. Coal Production

  14. Coal and Natural Gas Prices

  15. Increasing Prosperity • Must address all three stocks of regional capital • People • Place • Institutions • Must be based on a realistic assessment of advantages and potentials rather than simplistic comparisons to other places

  16. If You Build It… • There is a sense in which a region is like a firm: • If you provide something people want • And do it efficiently • And let them know about your product • Your prospects are good. • BTW: A firm that has to pay people to consume your product, you have some thinking to do.

  17. A Land of Natural Advantage • There is enormous untapped potential here • The way forward is: • Grounded in realistic assessment • And focused on the elements of prosperity rather than simple money measures of economic activity, which are a consequence of prosperity rather than a cause.

  18. Thank you Bill Shobe Center for Economic & Policy Studies Weldon Cooper Center for Public Service University of Virginia shobe@virginia.edu

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