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Asymmetric shocks among U.S. states

  • Del Negro, Marco

The paper uses a factor analysis model to study co-movements in non-durable consumption and output among the fifty U.S. states from 1969 to 1995. The paper finds that asymmetric shocks in output are, on average, large, i.e., of the same magnitude of U.S. business cycle fluctuations. Regional business cycles and state-specific shocks are equally important sources of asymmetries in output. Asymmetric shocks in consumption, excluding disturbances due to measurement error, are, on average, as large as asymmetric shocks to output, suggesting a lack of inter-state smoothing.

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File URL: http://www.sciencedirect.com/science/article/pii/S0022-1996(01)00127-1
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Article provided by Elsevier in its journal Journal of International Economics.

Volume (Year): 56 (2002)
Issue (Month): 2 (March)
Pages: 273-297

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Handle: RePEc:eee:inecon:v:56:y:2002:i:2:p:273-297
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/505552

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