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Cycles in the Transportation Sector and the Aggregate Economy

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Author Info

  • Kajal Lahiri
  • Wenxiong Yao
  • Peg Young

Abstract

Transportation plays a central role in facilitating economic activities across sectors and between regions, and is thus essential to business cycle research. Using four coincident indicators representing different aspects of the transportation sector that include an index of transportation output, payroll, personal consumption and employment, we define the classical business cycle and growth cycle chronologies for this sector. We find that, relative to the economy, business cycles in the transportation sector have an average lead of nearly 6 months at peaks and an average lag of 2 months at troughs. Similar to transportation business cycles, growth slowdowns in this sector also last longer than the economy-wide slowdowns by a few months. This study underscores the importance of transportation indicators in monitoring cyclical movements in the aggregate economy. (Keywords: Business cycle, Composite coincident index, Dynamic factor model, Regime switching, Growth cycle)

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Bibliographic Info

Paper provided by University at Albany, SUNY, Department of Economics in its series Discussion Papers with number 03-14.

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Date of creation: 2003
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Handle: RePEc:nya:albaec:03-14

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Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.
Phone: (518) 442-4735
Fax: (518) 442-4736

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Postal: Department of Economics, BA 110 University at Albany State University of New York Albany, NY 12222 U.S.A.
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References

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  17. Kajal Lahiri & Herman O. Stekler & Wenxiong Yao & Peg Young, 2003. "Monthly Output Index for the U.S. Transportation Sector," Discussion Papers 03-12, University at Albany, SUNY, Department of Economics.
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Cited by:
  1. Ferrara, Laurent & Guégan, Dominique, 2005. "Detection of the industrial business cycle using SETAR models," MPRA Paper 4389, University Library of Munich, Germany.

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