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Activity Number:
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150
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Type:
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Topic Contributed
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Date/Time:
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Monday, August 3, 2009 : 10:30 AM to 12:20 PM
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Sponsor:
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Business and Economic Statistics Section
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| Abstract - #303412 |
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Title:
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The Propagation of Regional Recessions
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Author(s):
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Michael Owyang*+ and James Hamilton
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Companies:
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Federal Reserve Bank of Saint Louis and University of California, San Diego
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Address:
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Research Division, St. Louis, MO, 63166-0442,
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Keywords:
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recession ; Markov-switching ; business cycles ; regions ; clustering
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Abstract:
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This paper develops a framework for inferring common Markov-switching components in a panel data set with large cross-section and time-series dimensions. We apply the framework to studying 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 beginning a national recession or recovery before others.
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