Why some states grow faster than others: New growth models for state economic policy

Recent studies have identified factors statistically related to differences in state economic growth. These findings relate to regional policy because they appear to identify political options that could then be justified as improving growth. This paper evaluates the reliability of these studies as policy guides. It finds that most statistical conclusions are fragile and are therefore risky policy guides. Economic base theory performs well, and provides the most reliable state level policy options. These policies, however. have to be crafted carefully to avoid pitfalls associated with traditional (and perhaps unpopular) basic industries.