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Regional employment growth and the business cycle

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  • Ellen R. Rissman

Abstract

Employment growth is highly correlated across regions. The author uses joint movements in regional employment growth to define and estimate a common factor, analogues to the business cycle. Regions differ substantially in the relative importance of cyclical shocks and idiosyncratic shocks in explaining the steady state variance in regional employment growth. For example, cyclical shocks account for almost 90 percent of the steady state variance in employment growth in the East South Central region and about 40 percent in the West South Central Region.

Suggested Citation

  • Ellen R. Rissman, 1999. "Regional employment growth and the business cycle," Economic Perspectives, Federal Reserve Bank of Chicago, issue Q IV, pages 21-39.
  • Handle: RePEc:fip:fedhep:y:1999:i:qiv:p:21-39:n:v.23no.4
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    References listed on IDEAS

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    1. Altonji, Joseph G & Ham, John C, 1990. "Variation in Employment Growth in Canada: The Role of External, National, Regional, and Industrial Factors," Journal of Labor Economics, University of Chicago Press, vol. 8(1), pages 198-236, January.
    2. Olivier Jean Blanchard & Lawrence F. Katz, 1992. "Regional Evolutions," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(1), pages 1-76.
    3. Katharine L. Bradbury, 1993. "Shifting patterns of regional employment and unemployment: a note," New England Economic Review, Federal Reserve Bank of Boston, issue Sep, pages 3-12.
    4. Arthur F. Burns & Wesley C. Mitchell, 1946. "Measuring Business Cycles," NBER Books, National Bureau of Economic Research, Inc, number burn46-1, January.
    5. Olivier J. Blanchard & Mark W. Watson, 1986. "Are Business Cycles All Alike?," NBER Chapters,in: The American Business Cycle: Continuity and Change, pages 123-180 National Bureau of Economic Research, Inc.
    6. Barro, Robert J, 1978. "Unanticipated Money, Output, and the Price Level in the United States," Journal of Political Economy, University of Chicago Press, vol. 86(4), pages 549-580, August.
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    Citations

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    Cited by:

    1. Michael T. Owyang & Jeremy Piger & Howard J. Wall, 2005. "Business Cycle Phases in U.S. States," The Review of Economics and Statistics, MIT Press, vol. 87(4), pages 604-616, November.
    2. De-Chih Liu, 2010. "Job creation and destruction by region in Taiwan," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 44(1), pages 167-184, February.
    3. Shyh-Wei Chen, 2007. "Using Regional Cycles to Measure National Business Cycles in the U.S. with the Markov Switching Panel Model," Economics Bulletin, AccessEcon, vol. 3(46), pages 1-12.
    4. Nicolaas Groenewold & Guoping Lee & Anping Chen, 2005. "Inter-Regional Spillovers in China: The Importance of Common Shocks and the Definition of Regions," Economics Discussion / Working Papers 05-19, The University of Western Australia, Department of Economics.
    5. Nicolaas Groenewold & Guoping Lee & Anping Chen, 2006. "Inter-Regional Output Spillovers of Policy Shocks in China," Economics Discussion / Working Papers 06-26, The University of Western Australia, Department of Economics.
    6. Jason Bram & Michael Anderson, 2001. "Declining manufacturing employment in the New York-New Jersey region: 1969-99," Current Issues in Economics and Finance, Federal Reserve Bank of New York, vol. 7(Jan).
    7. Groenwold, Nicolaas & Lee, Guoping & Chen, Anping, 2008. "Inter-regional spillovers in China: The importance of common shocks and the definition of the regions," China Economic Review, Elsevier, vol. 19(1), pages 32-52, March.
    8. Thomas Walker & David Norman, 2004. "Co-movement of Australian State Business Cycles," Econometric Society 2004 Australasian Meetings 334, Econometric Society.
    9. Nicolaas Groenewold & Guoping Lee & Anping Chen, 2006. "Inter-Regional Output Spillovers in China: Disentangling National from Regional Shocks," Economics Discussion / Working Papers 06-25, The University of Western Australia, Department of Economics.
    10. Michele Campolieti & Deborah Gefang & Gary Koop, 2013. "A new look at variation in employment growth in Canada," Working Papers 26145565, Lancaster University Management School, Economics Department.

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