fbpx

Latest Posts

Home

Facebook

Twitter

Search
About

Minnesota’s economy grew more slowly than 43 other states in the second quarter of 2017

As we write in our new report, The State of Minnesota’s Economy: 2017Minnesota’s economic growth is lagging. New data from the Bureau of Economic Analysis for the second quarter of 2017 bears this out.

Minnesota’s second quarter economic growth

Yesterday, the BEA released its figures for state GDP growth in the second quarter of 2017. As shown in Figure 1, Minnesota clocked in at a 1.2% seasonally adjusted annualized GDP growth rate. This is lower than 43 other states.

Figure 1

For the US as a whole, second quarter GDP growth was estimated as 2.8%. As Figure 2 shows, over the last year US growth has risen from 1.9% to 2.8%. In Minnesota, it has fallen from 5.8% to 1.2%.

Figure 2: Real GDP in chained dollars, % change from preceding period (annualized)

Source: Bureau of Economic Analysis

Thats the short run quarterly, what about the long run annually? 

Quarterly figures can be more volatile than annual figures. But even the annual data shows the same trend since the turn of the century. Minnesota’s economic growth has lagged the US average since 2000. Our state’s economy is now 2.5% smaller than it would have been if we had matched the national growth rate since then.

Furthermore, this is not the result of economic convergence. Minnesota is not doomed to its European growth rate by its relative affluence and North Dakota is not bound for its Chinese growth rate by virtue of its relatively lower income. This is what the economic theory of convergence might suggest. But, as I wrote last week, new research shows that convergence hasn’t been happening between high-income and low-income areas of the US over the period covered by our report.

Minnesota’s relatively slow rate of economic growth is just that; Minnesota’s. Much depends on trends at the national level, but the variations suggest that local factors play a role as well. What are these factors? How might we improve them? That is the subject of our new report, The State of Minnesota’s Economy: 2017.

John Phelan is an economist at the Center of the American Experiment. 

Comments

Subscribe

Categories

Upcoming Events

  • Morning in Minnesota: St. Cloud

    Location: St. Cloud

    Sign up HERE! Courtyard by Marriott St. Cloud 404 West Saint Germain Street St. Cloud, MN, 56301 Please join Center of the American Experiment on Tuesday, July 21 for breakfast with Center policy fellow and education expert Catrin Wigfall as she explains K-12 education in the state and its persistent disparities despite decades of increased spending. Following her presentation, Catrin will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude   Catrin Wigfall is a Policy Fellow at Center of the American Experiment. She is also the director of EducatedTeachersMN and EmployeeFreedomMN. Catrin’s…

    Register Now
  • Kristi Noem: The Courage to Reject a Shutdown

    Location: Online

    Sign up HERE! Join us Wednesday, July 8th for an interview with South Dakota Governor Kristi Noem over Zoom. In response to COVID-19, Noem defied the norm of a statewide shutdown and let South Dakotans choose for themselves what safety precautions to take. Tune in to this live online event to hear how Governor Noem preserved her state’s economy while still keeping citizens safe. Wednesday, July 8th at Noon CT Sign up HERE!  

    Register Now
  • Morning in Minnesota: Marshall

    Location: Marshall Golf Club

      Sign up for this event HERE! Please join Center of the American Experiment on Thursday, July 16 at Marshall Golf Club for a breakfast with Center economist, John Phelan, as he discusses Minnesota’s economic future. Following his presentation, John will lead a Q&A session. 7:30 AM Check In and Breakfast 8:00 AM Presentation 9:00 AM Conclude John Phelan is a graduate of Birkbeck College, University of London, where he earned a BSc in Economics, and of the London School of Economics where he earned an MSc. He worked in finance for ten years before becoming a professional economist. He…

    Register Now