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Two issues have dominated the discussion of US economic growth over the last decade: the dramatic slowdown in national productivity growth, and the economic decline of the older regions of the United States.'Each of these issues has been studied separately, but there have been few attempts to examine them jointly. Yet, there are good reasons to believe the two issues are connected. The older Snow Belt region of the United States has frequently been characterized as an area whose economic performance has been slowed by an aging public infrastructure, deteriorating urban environ-ment, an obsolete capital stock, and what Mancur Olson (1983a) has termed" institutional sclerosis." If this characterization is correct, it could substantially explain both the overall slowdown in national productivity, and the variation in growth rates across regions.

This paper addresses these issues using the Denison-Kendrick …