Bulletin n. 2-3/2012 | ||
October 2012-February 2013 | ||
Hamilton James D., Owyang Michael T. |
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The Propagation of Regional Recessions | ||
in Review of Economics and Statistics , volume 94 n.4 , 2012 , 935-948 | ||
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. | ||