This paper explores the determinants of population and employment densities interregionally. The theoretical model, due to Steinnes and Fisher, permits simultaneous determination of population and employment densities. This is applied to data for about 3,000 counties in the U.S. to analyze the effects of economic, demographic, climatic, and policyrelated variables on the growth of population and employment, during the 1970s. Considering employment, differential county growth is explained in terms of economic and demographic conditions; regional and policy variables matter less. For population, climate matters as a preference for sunbelt states is found. Local government programs regarding education and tax policy seem to play a role.

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Economists, beginning with Alfred Marshall, have studied the significance of cities in the production and exploitation of information externalities that, today, we call knowledge spillovers. This paper presents robust evidence of those effects. We show that patent intensitythe per capita invention rate-is positively related to the density of employment in the highly urbanized portion of MAs. All else equal, a city with twice the employment density (jobs per square mile) of another city will exhibit a patent intensity (patents per capita) that is 20 percent higher. Patent intensity is maximized at an employment density of about 2,200 jobs per square mile. A city with a more competitive market structure or one that is not too large (a population less than 1 million) will also have a higher patent intensity. These findings confirm the widely held view that the nation's densest locations play an important role in creating the flow of ideas that generate innovation and growth.

In this paper we use time-series techniques to examine whether monetary policy had symmetric effects across U.S. states during the 1958:1-1992:4 period. Impulse response functions from estimated structural vector autoregression models reveal differences in policy responses, which in some cases are substantial. We provide evidence on the reasons for the measured cross-state differential policy responses. The size of a state's response is significantly related to industry-mix variables, providing evidence of an interest rate channel for monetary policy, although the state-level data offer no support for recently advanced credit-channel theories.