Economic Development and Volatility among the States

Thomas Grennes, Pablo Guerron and Asli Leblebicioglu ()

Economics Bulletin, 2010, vol. 30, issue 3, 1963-1976

Abstract: Using state level personal income, we empirically demonstrate the importance of economic development and diversification for the changes in volatility. We show that volatility of income growth is initially decreasing in the level of income and the degree of diversification. Yet, as state income continues rising, its volatility starts increasing. We also find that expansion of interstate banking and the size of the service sector are among the factors that have influenced volatility.

Keywords: State Level Moderation; Economic Development; Specialization (search for similar items in EconPapers)
JEL-codes: E3 O1 (search for similar items in EconPapers)
Date: 2010-07-27
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Citations: View citations in EconPapers (1)

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