Remaking the Los Angeles Economy: Cyclical Fluctuations and Structural Evolution

Abstract

Discusses the causes of recent economic problems in Los Angeles, CA, & the nature of long-term strategies for economic revitalization. Despite recent economic recovery in the entertainment, telecommunications, apparel, light manufacturing, & international trade industries, unemployment & an increasing welfare burden persist. In terms of structural evolution, the major impediments to economic growth in the region have been the high costs of local production, overly strict regulatory restraints, & massive loss of government support for Los Angeles's aerospace & defense industries. Cyclical factors inhibiting growth include overbuilding in the real estate market, oversupply of office space, decreased demand for construction, & erosion of the financial services industry. It is argued that long-term growth can be achieved through positive exploitation of Los Angeles's unique advantages: geographic location as a gateway for trade with the Pacific Rim & Latin America, & the population diversity necessary for consolidation & expansion of trade relations. However, these advantages have been undermined by racial & economic polarization, high costs of living & production, erosion of the transportation system, pollution, decline in public education, & deterioration of public safety. 3 Tables, 7 References. T. Sevier