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Asymmetric shocks among U.S. states

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  • Marco Del Negro

    (Centro de Investigacion Economica (CIE), Instituto Tecnologico Autonomo de Mexico (ITAM))

Abstract

The paper uses a factor analysis model to study co-movements in non-durable consumption and output among the fifty U.S. states from 1969 to 1995. The paper finds that asymmetric shocks in output are, on average, large, i.e., of the same magnitude of U.S. business cycle fluctuations. Regional business cycles and state-specific shocks are equally important sources of asymmetries in output. Asymmetric shocks in consumption, excluding disturbances due to measurement error, are, on average, as large as asymmetric shocks to output, suggesting a lack of inter-state smoothing.

Suggested Citation

  • Marco Del Negro, 1999. "Asymmetric shocks among U.S. states," Working Papers 9903, Centro de Investigacion Economica, ITAM.
    • Handle: RePEc:cie:wpaper:9903
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    References listed on IDEAS

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    More about this item

    Keywords

    Intranational business cycles; Risk sharing; Factor analysis;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration

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