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Economic Perspectives, 11, 4th, No. 6, November 1987
Is the Seventh District's Economy Deindustrializing?

The Seventh Federal Reserve District is located on the western flank of what has been called the nation's "Rust Belt." It is easy to see how this characterization might be applied to the Seventh District. The District's economy is heavily specialized in a number of troubled industries: automotive (Michigan), steel and machine tools (Illinois, Indiana and Wisconsin), and a set of industries closely linked to the production and processing of food (Iowa). All of these have been adversely affected by structural changes in the national economy arising from international trade, such as the rising tide of auto and steel imports and the fall of grain exports, or changing product demand, such as the emergence of the computer. Indeed, an image of idle factories and massive blue-collar unemployment that seems to pervade the Seventh District has raised fears of nationwide deindustrialization, or an absolute decline of output produced in the nation's manufacturing sector.



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