Understanding the Lead/Lag Structure Among Regional Business Cycles

Ca Foscari University of Venice Department of Economics Working Paper No. 06/WP/2011

28 Pages Posted: 29 Jun 2011 Last revised: 4 Dec 2012

See all articles by Stefano Magrini

Stefano Magrini

Ca Foscari University of Venice - Dipartimento di Economia

Margherita Gerolimetto

Ca Foscari University of Venice

Hasan Engin Duran

Independent

Date Written: June 1, 2011

Abstract

The analysis of synchronization among regional or national business cycles has recently been attracting a growing interest within the economic literature. Far less attention has instead been devoted to a closely related issue: given a certain level of synchronization, some economies might be systematically ahead of others along the swings of the business cycle. In other words, there could be a lead/lag structure in which some economies systematically lead or lag behind others.

In the present paper we aim at providing a thorough analysis of the lead/lag structure among a system of regional economies. This task is achieved in two steps. First, we show that leading (or lagging behind) is a feature that does not occur at random across the economies. Second, we investigate the economic drivers that could explain such a behavior. To do so, we employ data for 48 conterminous US states between 1979 and 2010.

Keywords: Regional business cycles, lead/lag structure, synchronization

JEL Classification: R10, E32, O18, F40

Suggested Citation

Magrini, Stefano and Gerolimetto, Margherita and Engin Duran, Hasan, Understanding the Lead/Lag Structure Among Regional Business Cycles (June 1, 2011). Ca Foscari University of Venice Department of Economics Working Paper No. 06/WP/2011, Available at SSRN: https://ssrn.com/abstract=1874086 or http://dx.doi.org/10.2139/ssrn.1874086

Stefano Magrini (Contact Author)

Ca Foscari University of Venice - Dipartimento di Economia ( email )

Cannaregio 873
Venice, 30121
Italy

Margherita Gerolimetto

Ca Foscari University of Venice ( email )

Dorsoduro 3246
Venice, Veneto 30123
Italy

Hasan Engin Duran

Independent

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