With the national economy in recession,concern about the sensitivity of local economic activity to national economic cycles has Jurisdictions facing high unemployment rates have searched intensified. for ways to insulate their labor markets and public sector budgets from the impact of national fluctuations in economic activity. The long-run consequences local economies of steeper and more frequent cyclical troughs remains for uncertain.

The purpose of this paper is to review the economic literature garding local, private-market impacts' of national economic cycles.A companion paper will review the impact of economic cycles on the local public sector. Both papers are being prepared as the first stage of a cooperative agreement between the Department of Housing and Urban Development and The Urban Institute to study the effects of business cycles on the economy of cities.

This report is part of the collection of scanned historical documents available to the public.