The Propagation of Regional Recessions

James Hamilton and Michael Owyang

The Review of Economics and Statistics, 2012, vol. 94, issue 4, 935-947

Abstract: This paper develops a framework for inferring common Markov-switching components in panel data sets with large cross-section and time series dimensions. We study similarities and differences across U.S. states in the timing of business cycles. We hypothesize that there exists a small number of cluster designations, with individual states in a given cluster sharing certain business cycle characteristics. We find that although oil-producing and agricultural states can sometimes experience a separate recession from the rest of the United States, for the most part, differences across states appear to be a matter of timing, with some states entering recession or recovering before others. © 2012 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Keywords: university tuition; graduation rates (search for similar items in EconPapers)
JEL-codes: C11 C32 E32 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (93)

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Related works:
Working Paper: The Propagation of Regional Recessions (2011)
Working Paper: The propagation of regional recessions (2009)
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