• Downturn in NE and SC
○ More steep than national level
• Same characteristics
○ Same size: 6.7VS.6.8
○ Difference: service and finance
§ NE: services↑, finance↓
• Cause
○ Conventional idea
§ Manufacturing + real eatate market
□ SC: national defense spending↓ →manufacturing ↓
○ Analysis
§ Role of policy