Wisconsin-Minnesota GDP Growth Compared

State level quarterly GDP for Q2 was just released today by BEA. Since people are still debating the efficacy of the Scott Walker economic policies in spurring growth (see e.g., here), I thought it of interest to compare the broadest measure of economic activity — real GDP — between Wisconsin and its neighbor, Minnesota. Shown below is the 4 quarter growth rate differential between Minnesota and Wisconsin.

Figure 1: Four quarter growth rate of GDP of Minnesota minus Wisconsin (blue line), and averages for periods 2006-10, and 2012-18 (red lines). Positive values indicate Minnesota growth exceeds Wisconsin. Light orange shading denotes Walker administrations. Source: BEA and author’s calculations.

While the average growth rate 2006-10 is not significantly different from zero, it is significantly different from zero over the Walker-Dayton years (at the 1% msl, using robust standard errors).

The underlying data are available here.

 

7 thoughts on “Wisconsin-Minnesota GDP Growth Compared

  1. pgl

    “Since people are still debating the efficacy of the Scott Walker economic policies in spurring growth (see e.g., here)”

    We would love to read your prior post on this but “here” is accompanied with a hyperlink.

    Reply
  2. joseph

    It’s worth noting that while Wisconsin has had a Democratic governor for the last two years, the legislature is still dominated and controlled by Walkerites. Also worth noting that immediately after the election, even before Evers took office, the Walkerite legislature voted to severely restrict the powers of the governor — restrictions they will no doubt remove the moment a Republican governor is elected.

    Reply
  3. James

    Dear Menzie.
    As a Wisconsinite, I would like to say thank you for your work. What I find interesting is that GOP admins lead to overall depressed economic conditions for the those who happen to live in GOP controlled areas and under GOP presidential admins. (Examples: https://www.jec.senate.gov/public/index.cfm/democrats/2016/6/the-economy-under-democratic-vs-republican-presidents and https://www.brookings.edu/blog/the-avenue/2020/11/09/biden-voting-counties-equal-70-of-americas-economy-what-does-this-mean-for-the-nations-political-economic-divide/ ) But, yet, the Villager pundits and Fox News keep spinning the myth that the GOP is better for economy. Also – the GOP is doing everything they can to obstruct but Dem admin is helping us climb out of the ditch Trump and criminal GOP crowd created https://www.cnn.com/2021/09/30/economy/us-economy-second-quarter-gdp-revision/index.html Thanks.

    Reply
  4. macroduck

    Every discussion of policy differences ought to come with a generic topographic map showing local maxima. Then, simply add labels appropriate to the particular discussion.

    Walker certainly was aiming at maximizing benefit to rich donors and critical primary voter groups, but pretended to be maximizing for whom, “the good people to of the State of Wisconsin”? Local maximum output, heavily skewed toward his Koch-brother masters. There are other output maxima, some much more beneficial to, say, teachers and other public-sector union members. Not Koch friendly.

    Politicians pretend the other party (or faction, in today’s Democratic Party) wants something bad for he economy. Generally, the economy is secondary. The economy can take care of itself except during critical periods (which seem to arrive with some frequency lately). Politicians are in the business of deciding who benefits. Progressives (or “the far left” as they were described today on NPR) are a least honest that they want to help the majority at a cost to the rich minority. All else equal, I’ll trust the guy who is honest as to intentions.

    A slower rate of growth wasn’t Walker’s goal, but it wasn’t too high a price in order to please his masters.

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