Asymmetric shocks among U.S. states

Marco Del Negro

No 2000-27, FRB Atlanta Working Paper from Federal Reserve Bank of Atlanta

Abstract: This paper applies a factor model to the study of risk sharing among U.S. states. The factor model makes it possible to disentangle movements in output and consumption due to national, regional, or state-specific business cycles from those due to measurement error. The results of the paper suggest that some findings of the previous literature which indicate a substantial amount of interstate risk sharing may be due to the presence of measurement error in output. When measurement error is properly taken into account, the evidence points towards a lack of interstate smoothing.

Keywords: Consumption (Economics); Business cycles (search for similar items in EconPapers)
Date: 2000
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Related works:
Journal Article: Asymmetric shocks among U.S. states (2002)
Working Paper: Asymmetric shocks among U.S. states (1999)
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