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The UK intranational business cycle

Author

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  • Michael Artis

    (Economics Department, University of Swansea, and CEPR, London, UK)

  • Toshihiro Okubo

    (RIEB, Kobe University, Japan)

Abstract

The paper uses annual data on real GDP for 12 UK regions and 12 manufacturing sectors to derive regional and regional|sectoral business cycles using a Hodrick-Prescott filter. The cohesion of the cycles is examined via cross-correlations and comparisons made with the regional cycles for Japan, the USA and the euro area. The UK emerges as especially cohesive and efforts to explain the overall cross-correlations of regional GDP are not very successful owing to the low variance of the explicand; when attention is turned to the sectoral|regional cycles, with their greater variance, it is possible to demonstrate that economic variables such as distance, dissimilarity in structure and level of output play a significant role in explaining the variance in the cross-correlations. A significant feature of the cross-correlations in relation to those of EU countries is that while they continue to provide support for the 'UK idiosyncrasy' they no longer do so as strongly as they did in earlier data samples. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Michael Artis & Toshihiro Okubo, 2010. "The UK intranational business cycle," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 29(1-2), pages 71-93.
  • Handle: RePEc:jof:jforec:v:29:y:2010:i:1-2:p:71-93 DOI: 10.1002/for.1141
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    References listed on IDEAS

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    Cited by:

    1. Huang, Shuo & Fidrmuc, Jan & Fidrmuc, Jarko, 2015. "Whither China? Reform and economic integration among Chinese regions," China Economic Review, Elsevier, pages 94-110.
    2. Cantoni, Davide & Yuchtman, Noam, 2013. "The political economy of educational content and development: Lessons from history," Journal of Development Economics, Elsevier, vol. 104(C), pages 233-244.
    3. João Sousa Andrade & António Portugal Duarte, 2012. "The Importance of a Good Indicator for Global Exciess Demand," Book Chapters, Institute of Economic Sciences.
    4. Huang, Shuo & Fidrmuc, Jan & Fidrmuc, Jarko, 2015. "Whither China? Reform and economic integration among Chinese regions," China Economic Review, Elsevier, pages 94-110.
    5. João Sousa Andrade & António Portugal Duarte, 2014. "Output-gaps in the PIIGS Economies: An Ingredient of a Greek Tragedy," GEMF Working Papers 2014-06, GEMF, Faculty of Economics, University of Coimbra.

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