The Effect of Monetary and Fiscal Policies on Regional Business Cycles

Charles B. Garrison and Hui S. Chang
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Charles B. Garrison: Department of Economics The University of Tennessee Knoxville, Tennessee 37916 USA
Hui S. Chang: Department of Economics The University of Tennessee Knoxville, Tennessee 37916 USA

International Regional Science Review, 1979, vol. 4, issue 2, 167-180

Abstract: A Keynesian reduced-form quarterly model of regional income determination is constructed and tested for the eight regions of the United States. The results support the view that national economic policy exerts a significant direct influence on a region's export earnings. The findings are in conflict with some monetarist models, in that fiscal policy, as well as monetary policy, strongly influences regional basic economic activity. Also, the findings suggest the desirability of incorporating national policy variables into regional econometric models.

Date: 1979
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Persistent link: https://EconPapers.repec.org/RePEc:sae:inrsre:v:4:y:1979:i:2:p:167-180

DOI: 10.1177/016001767900400206

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