This paper provides a capsule perspective on the lessons economists have learned from investigating growth and income gaps across countries. After providing the lessons for growth and development across countries, the paper asks whether these lessons can be extended to growth and income differentials between regions or states of the United States. It should be stressed that applying to regional growth what is known about country growth is partly untested at this time, and hence merely suggestive.

For decades, Arizona was one of the national leaders in aggregate economic growth, as measured by the percent change in measures such as gross product and employment. However, its growth rate always has been highly cyclical. During expansionary periods, Arizona always has been among the top states on the rate of growth. During recessions, the Arizona economy generally slumped at a rate similar to the national average, but would experience a rapid recovery. This pattern continued through the economic expansion of the mid-2000s.