The Effect of Business Cycles on Metropolitan Suburbanization

This paper presents evidence that the process of metropolitan decentralization depends upon rates of national economic growth. The rate of suburbanization accelerates during expansions in the national economy and then declines when the national economy is sluggish. This uneven process of suburbanization occurs because during periods of strong national economic growth net investment rises. Investors, those considering both expansion at on-site locations or new business formations, favor suburban locations. When national economic growth contracts, aggregate investment stagnates and the process of suburbanization slows.