During the 1999-2004 monetary tightening cycle there was a significant disparity in employment growth across various regions in the United States. At the national aggregate level, the three major labor market theories do not provide a clear explanation for this disparity in regional employment growth rates. This is consistent with the fact that there continues to be disagreement regarding the effect of monetary policy across regions. According to Gerald Carlino at the Federal Reserve Bank of Philadelphia, the standard view of monetary policy is that it has a "single, uniform national effect" throughout the country. Furthermore, "There is currently little evidence on whether and to what extent monetary policy actions have differential effects on regional economic activity."1;The analysis in this dissertation suggests how monetary policy can affect some regions in a distinctly different way than it affects other regions. Not only do the effects vary widely from region to region, but there are aspects of the effects that are predictable and potentially manageable at the regional level.;1Gerald Carlino and Robert Defina, "The Differential Regional Effects of Monetary Policy," (The MIT Press, 1998), 572.
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