This paper looks at the distribution of aspects of wealth, debt and investment, which will be affected by changes in interest rates, housing prices and the stock market, and will in turn affect spending and overall economic activity.

The global economic downturn will test the resilience of local economies. Declines in the economic capacity of individuals and businesses will reduce their capacity to weather further shocks. Local governments too, will be affected in different ways through possible income decline and higher service demand. Local economies that lack a diverse industry base or skilled workforce are the most likely to be adversely affected by the economic downturn and may face long term adjustment pressures. The process of economic recovery and structural adjustment, however, will also bring opportunities for local economies. It will be a time for local governments to lead their communities toward economic growth and sustainability.