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Integrating Money Into Regional Models Of Leading Indicators

Author

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  • Paul J. Kozlowski

    (University of Toledo)

Abstract

Given the role of monetary changes in explaining business cycles, a challenge for regional analysts is to integrate monetary processes into leading indicator models. This paper examines economic processes imbedded in regional models and analyzes changes in forecasting performance when a national monetary indicator is integrated into these models. Performance of the models, with and without the monetary variable, is examined with respect to turning points, volatility, false signals, and quantitative forecasts. The results show that integrating a national monetary indicator into the regional models of leading indicators is conceptually sound as well as empirically promising, and may contribute to the information content imbedded in this class of models.

Suggested Citation

  • Paul J. Kozlowski, 1991. "Integrating Money Into Regional Models Of Leading Indicators," The Review of Regional Studies, Southern Regional Science Association, vol. 21(3), pages 235-248, Fall.
    • Handle: RePEc:rre:publsh:v21:y:1991:i:3:p:235-248
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    References listed on IDEAS

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    1. Zarnowitz, Victor, 1985. "Recent Work on Business Cycles in Historical Perspective: A Review of Theories and Evidence," Journal of Economic Literature, American Economic Association, vol. 23(2), pages 523-580, June.
    2. Abdullah, Dewan A & Rangazas, Peter C, 1988. "Money and the Business Cycle: Another Look," The Review of Economics and Statistics, MIT Press, vol. 70(4), pages 680-685, November.
    3. Kozlowski, Paul J., 1989. "Forecasting With Leading Indicators: Regional Economic Sense or Nonsense," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 19(01), pages 1-22.
    4. Charles T. Carlstrom & Edward N. Gamber, 1989. "Why we don't know whether money causes output," Economic Review, Federal Reserve Bank of Cleveland, vol. 25(Q III), pages 27-39.
    5. Koch, Paul D & Rasche, Robert H, 1988. "An Examination of the Commerce Department Leading-Indicator Approach," Journal of Business & Economic Statistics, American Statistical Association, vol. 6(2), pages 167-187, April.
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    Cited by:

    1. Paul J. Kozlowski, 1995. "Money And Interest Rates As Predictors Of Regional Economic Activity," The Review of Regional Studies, Southern Regional Science Association, vol. 25(2), pages 143-157, Fall.
    2. Carlos Rodriguez-Fuentes & Sheila Dow, 2003. "EMU and the Regional Impact of Monetary Policy," Regional Studies, Taylor & Francis Journals, vol. 37(9), pages 969-980.

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