Determinants of Differences in Regional Cyclical Variability

Stefan Norrbin

The Review of Regional Studies, 1988, vol. 18, issue 3, 16-22

Abstract: In this paper the problem is approached somewhat differently, in an attempt to test the difference in regional cycles directly. This approach permits testing whether specific characteristics inherent in a regional economy lead to higher or lower regional cyclical variability than in other regions. If such characteristics exist, states with higher or lower than average natural regional cyclical variability could be identified. To be able to test directly some of the explanations for differences in magnitudes of business cycle variations between regions, the variance of the cyclical component of employment in each region is calculated. These estimates of regional cyclical variability can be used to test the theories of regional business cycles in a cross-sectional OLS approach. The following section explains the hypothesis developed earlier by several authors but not yet tested. In section III the model used to estimate the cyclical variability is presented. In section IV the results are presented, and some conclusions and a brief discussion of the relevance of the findings are provided in section V.

Date: 1988
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