The literature review entitled "The Sensitivity of Local Economic Activity to National Economic Cycles, "by Peterson and Manson, identifies two gaps in the business cycle literature. One gap is in our knowledge of the cyclical sensitivity of central cities. The second is in our understanding of the effects of economic expansions and contractions on the decentralization of employment. Both topics will be addressed in this study.

A third issue to be explored here is the extent to which cross area differences in plant closings occur during recessions and expansions. Since the literature review noted above addresses the first two topics, we will not retrace the authors' steps. Rather, this paper now turns to consider the literature on sensitivity of plant closings to the business cycle and the geographical distribution of plant closings. This literature review is followed by an outline of the questions addressed in this part of The Urban Institute's study and a discussion of the data use to carry it out.

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