TY  - JOUR
AU  - Ghosh,Atish R.
AU  - Wolf,Holger C.
TI  - Geographical and Sectoral Shocks in the U.S. Business Cycle
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6180
PY  - 1997
Y2  - September 1997
UR  - http://www.nber.org/papers/w6180
L1  - http://www.nber.org/papers/w6180.pdf
N1  - Author contact info:
Atish R. Ghosh
Research Department
International Monetary Fund
HQ1-09-612
700 19th Street, N.W.
Washington DC, 20431
E-Mail: aghosh@imf.org

Holger C. Wolf
Center for German and European Studies
ICC-503
School of Foreign Service
Georgetown University
Washington, DC  20057
Tel: 202/687-8079
Fax: 202/687-8359
E-Mail: moneyhist@aol.com
AB  - We examine whether the aggregate U.S. business cycle is driven mainly by geographical" shocks (affecting all sectors within a state), or by sectoral shocks (affecting the same sector in all" states).  We find that, at the level of an individual sector in an individual state growth are driven by the sector, not by the state: textiles in Texas moves more with textiles" elsewhere in the U.S. than with other sectors in Texas.  But shocks to sector growth rates exhibit" a lower correlation across sectors compared to the correlation of shocks to state growth rates" across states.  As a result, geographical shocks gain greater importance at higher levels of" aggregation.  Finally, we find that changes in the volatility of the aggregate U.S. business cycle" reflect, to a roughly comparable degree, both changes in the volatility of state and sector business" cycles, and changes in their correlation across sectors and states.
ER  -