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The Long and Large Decline in State Employment Growth Volatility

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  • GERALD A. CARLINO
  • ROBERT DEFINA
  • KEITH SILL

Abstract

This study documents a general decline in the volatility of employment growth during the period 1956–2002 and examines its possible sources. We use a panel design that exploits the considerable state‐level variation in volatility during the period. The roles of monetary policy, oil prices, industrial employment shifts, and a coincident index of business cycle variables are explored. Overall, these four variables taken together explain as much as 31% of the fluctuations in employment growth volatility. Individually, each of the four factors is found to have significantly contributed to fluctuations in employment growth volatility, although to differing degrees.

Suggested Citation

  • Gerald A. Carlino & Robert Defina & Keith Sill, 2013. "The Long and Large Decline in State Employment Growth Volatility," Journal of Money, Credit and Banking, Blackwell Publishing, vol. 45(2‐3), pages 521-534, March.
  • Handle: RePEc:wly:jmoncb:v:45:y:2013:i:2-3:p:521-534
    DOI: 10.1111/jmcb.12014
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    File URL: https://doi.org/10.1111/jmcb.12014
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    Cited by:

    1. Hasan Engin Duran, 2015. "Regional Employment Volatility In Turkey: Causes And Consequences," Working Papers 2015/06, Turkish Economic Association.
    2. Owyang, Michael T. & Piger, Jeremy & Wall, Howard J., 2008. "A state-level analysis of the Great Moderation," Regional Science and Urban Economics, Elsevier, vol. 38(6), pages 578-589, November.
    3. Steven J. Davis & James A. Kahn, 2008. "Interpreting the Great Moderation: Changes in the Volatility of Economic Activity at the Macro and Micro Levels," Journal of Economic Perspectives, American Economic Association, vol. 22(4), pages 155-180, Fall.
    4. Owyang, Michael T. & Rapach, David E. & Wall, Howard J., 2009. "States and the business cycle," Journal of Urban Economics, Elsevier, vol. 65(2), pages 181-194, March.
    5. Steven J. Davis & James A. Kahn, 2007. "Macroeconomic implications of changes in micro volatility," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
    6. Hasan Engin Duran, 2019. "Structural change and output volatility reduction in OECD countries: evidence of the Second Great Moderation," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 8(1), pages 1-14, December.

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