One Business Cycle and One Trend from (Many) Many Disaggregates

Danny Quah ()

No 873, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Typical analyses of trends and cycles take as given some (one) observable economic variable in whose time path a researcher wishes to find trend and cycle movements. But individual sectors and regions in aggregate economies move neither perfectly with nor independently of each other -- why is it useful to study their aggregate? Using a model for non-stationary, dynamically evolving distributions, this paper provides evidence that in the United States, regional movements that preserve their aggregate time path nevertheless have important, predictive comovements with aggregate GNP. Such predictive content cannot be understood in traditional macro models that seek the source for business cycles in aggregate productivity or monetary shocks.

Keywords: Business Cycle; Distribution Dynamics; Economic Fluctuation; Geographical Region; Growth; Large Cross-Section (search for similar items in EconPapers)
JEL-codes: C33 E32 E37 (search for similar items in EconPapers)
Date: 1994-01
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Related works:
Working Paper: One Business Cycle and One Trend From(Many) Many Disaggregates (1993)
Journal Article: One business cycle and one trend from (many,) many disaggregates (1994)
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