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Aggregate and Regional Disaggregate Fluctuations

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  • Danny Quah

Abstract

This paper models fluctuations in regional disaggregates as a nonstationary, dynamically evolving distribution. Doing so enables study of the dynamics of aggregate fluctuations jointly with those of the rich cross-section of regional disaggregates. For the US, the leading state- regardless of which it happens to be- contains strong predictive power for aggregate fluctuations. This effect is difficult to understand if only aggregate disturbances affect aggregate business cycles through aggregate propagation mechanisms. Instead, a better picture might be one of a "wave" of regional dynamics, rippling across the national economy.

Suggested Citation

  • Danny Quah, 1996. "Aggregate and Regional Disaggregate Fluctuations," CEP Discussion Papers dp0275, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp0275
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