Sources of sectoral employment fluctuations in central cities and suburbs:Evidence from four eastern US cities

We develop a structural vector autoregression for a model of suburban and c entral city sectoral employment. Orthogonalized shocks attributable to nati onal, sectoral, suburban, central city, and local sectoral sources can be i dentified and used to delineate the sources of fluctuations in sectoral mov ements in the two parts of the metropolitan area. We apply the model to fou r Metropolitan Statistical Areas and find that in the short run there is ve ry little in the way of feedback between central city and suburban employme nt; local shocks matter most of all. In the long run there are a substantia l number of city industries where demand and/or supply shocks have spillove r effects across the border of central city and suburb. (C) 2000 Academic P ress.