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Economic Prosperity in Kentucky: Energy, Environment, and Other Factors. Presentation to the 2014 Governor’s Conference on Energy and the Environment: The Changing Landscapes in Kentucky Michael Childress Center for Business and Economic Research University of Kentucky October 7, 2014.
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Economic Prosperity in Kentucky:Energy, Environment, and Other Factors Presentation to the 2014 Governor’s Conference on Energy and the Environment: The Changing Landscapes in Kentucky Michael Childress Center for Business and Economic Research University of Kentucky October 7, 2014
Keys to Prosperity • State Growth Empirics: The Long-Run Determinants of State Income Growth (Federal Reserve Bank of Cleveland) • Examined income changes from 1939 to 2004 • Basic question—why do some states do better than others? • Knowledge Stocks (educational achievement/patents) • Industry Structure • Negative association with manufacturing and mining • Other (e.g., climate, taxation, regulation)
The “Brain Hubs” Phenomenon • Individual factors, like educational attainment, are vital for economic prosperity • But sometimes where you live is just as important as what you know • UC Berkeley economist Enrico Moretti, The Geography of Jobs, writes about “brain hubs” or “innovation clusters” • Thick labor market for highly specialized innovation-driven workers and support personnel—as well as a lot of “social interaction”
How does this relate to us? • Richard Florida • The quality of place matters to the economy • What’s there (the natural and built environment) • Who’s there (the people) • What’s going on (what people are doing, our relationship with the natural and built environments). • The quality of Kentucky’s environment has important economic development implications
Does this mean that “cheap” energy isn’t important? • No, it means is that “cheap” electricity is just one of many factors.