Chattanooga is situated at the literal crossroads between Atlanta, Birmingham, Knoxville, and Nashville, whose combined employment growth rate over the past 10 years was nearly double the national average. A full understanding of the Chattanooga metro economy requires an understanding of how it interacts with these large metro areas in its booming region. This paper tries to untangle the interregional links by testing for Granger-causality, or predictability, between metro areas within the region. It finds that higher growth in the Atlanta, Knoxville, and Nashville metro areas tends to be followed by higher growth in the Chattanooga metro area. The signs and magnitudes of these effects are useful for forecasting the near future of the Chattanooga labor market.
Read a blog post for more of the story.
