TY  - JOUR
AU  - Brown,Scott J.
AU  - Coulson,N. Edward
AU  - Engle,Robert F.
TI  - Non-Cointegration and Econometric Evaluation of Models of Regional Shift and Share
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3291
PY  - 1990
Y2  - March 1990
UR  - http://www.nber.org/papers/w3291
L1  - http://www.nber.org/papers/w3291.pdf
N1  - Author contact info:
Scott Brown
E-Mail: scottbro@gmail.com

N. Edward Coulson
E-Mail: fyj@psu.edu

Robert F. Engle, III
Department of Finance, Stern School of Business
New York University, Salomon Center
44 West 4th Street, Suite 9-160
New York, NY  10012-1126
Tel: 212/998-0710
Fax: 212/995-4220
E-Mail: rengle@stern.nyu.edu
AB  - This paper tests for cointegration between regional output of an industry and national output of the same industry. An equilibrium economic theory is presented to argue for the plausibility of cointegration, however, regional economic forecasting using the shift and share framework often acts as if cointegration does not exist. Data analysis on broad industrial sectors for 20 states finds very little evidence for cointegration. Forecasting models with and without imposing cointegration are than constructed and used to forecast out of sample. The simplest, non-cointegrating models are the best.
ER  -