Abstract
Abstract: Since regional economies are exposed to the region common shock, the degree of co-movement of each region's business cycle is strong, possibly exaggerating or biasing the dependency on its neighbor regions. By separating out the common shock and the individual shocks using a multi-level dynamic factor model suggested by Bai and Wang, the possible misunderstanding of regional interdependency can be prevented. An application to the Great Lakes region revealed that much of the region-specific business activities can be explained by the region common shock, and the spillovers from neighbors are small or insignificant.
| Translated title of the contribution | Competitive and Complementary Relationship between Regional Economies: A Study of the Great Lake States |
|---|---|
| Original language | Spanish |
| Pages (from-to) | 205-229 |
| Number of pages | 25 |
| Journal | Spatial Economic Analysis |
| Volume | 10 |
| Issue number | 2 |
| DOIs | |
| State | Published - Apr 3 2015 |
Keywords
- dynamic factor model
- multi-level
- Regional business cycle
- spillover effects
ASJC Scopus subject areas
- Geography, Planning and Development
- Economics, Econometrics and Finance(all)
- Statistics, Probability and Uncertainty
- Earth and Planetary Sciences (miscellaneous)