Aggregate and Regional Disaggregate Fluctuations

Quah, Danny

doi:10.1007/978-3-642-61211-4_7

Cited by 31 publications

(26 citation statements)

References 30 publications

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“…The largest clusters in agriculture and manufacturing comprise four countries, whereas non‐market services exhibit the highest degree of convergence with a five country cluster. This confirms the findings of Quah (1996) and Bernard and Jones (1996) that convergence is easier to find in the service sector perhaps because most countries (and regions) tend to have similar types of basic market and non‐market services.…”

Section: The Observed Clusterssupporting

confidence: 85%

Identifying and Interpreting Regional Convergence Clusters Across Europe

Corrado

Martin

Weeks

2005

The Economic Journal

128

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In this paper we test for regional convergence clusters across the EU. We utilise a methodology that allows for the endogenous selection of regional clusters using a multivariate test for stationarity, where the number and composition of clusters are determined by the application of pairwise tests of regional differences in per capita output over time. To interpret the composition of the resulting convergence clusters, the latter are tested against a number of possible groupings suggested by recent theories and hypotheses of regional growth and convergence. Further, our method allows regional convergence clusters to vary over time.Since the mid-1980s, the study of long-term growth has made a major re-appearance on the research agenda in economics. An important stimulus for this revival has been the renewed interest in the empirics of growth, and especially the evidence that rates of long-run convergence of per capita output and incomes between nations, and even between regions within nations, appear to be much slower and far more variable than predicted by the standard Solow-Swan neoclassical growth model (Abramovitz, 1986;Boltho and Holtham, 1992). One consequence has been the emergence of a 'new' growth theory that incorporates increasing returns and technical change within the production function as determinants of the (endogenous) long-term growth rate (Romer, 1986;Lucas, 1988;Grossman and Helpman, 1994;Barro and Sala-i-Martin, 1997). Although several variants of this new endogenous growth theory have been developed, all permit a wider set of possibilities with regard to convergence behaviour. Some variants predict 'conditional' convergence of national (regional) per capita incomes to different long-run steady states that depend on initial national (regional) differences in institutional set-up, economic structure, tastes and so on. Others allow for so-called 'club' convergence among countries (regions) with similar structural and related conditions. Still others, including models that assume that technological advance is highly localised and its diffusion slow, predict persistent or even divergent differences in national (or regional) per capita output and incomes as long run outcomes (Bertola, 1993).At the same time, the emergence over the past decade or so of the so-called 'new economic geography' models of industrial location and agglomeration has highlighted how many sources of increasing returns are associated with Marshalliantype external localisation economies (such as access to specialised local labour inputs, local market access and size effects, local knowledge spillovers, and the like). These models provide a rich set of possible long-run regional growth patterns that depend, among other things, on the relative importance of transport costs and localisation economies (Fujita et al., 1999;Brackman et al., 2001;

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Section: The Observed Clusterssupporting

confidence: 85%

Identifying and Interpreting Regional Convergence Clusters Across Europe

Corrado

Martin

Weeks

2005

The Economic Journal

128

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“…Rather, we are simply suggesting that mode-locking is the dominant factor forcing regional business cycle synchronization. The mode-locking hypothesis of business cycle synchronization also provides an explanation consistent with the views of Quah (1996) and Sill (1997) of economic shocks appearing to ''roll'' or ''ripple'' across the country and in which we see a synchronization with slight lags.…”

Section: Discussionsupporting

confidence: 55%

“…Consequently, military expenditure does not appear to be a major factor behind regional business cycle synchronization in the United States. Quah (1996) investigates the relationship between aggregate and regional fluctuations. He finds significant two-way interaction between aggregate and disaggregate behavior and fluctuations.…”

Section: Literature Reviewmentioning

confidence: 99%

Mode-Locking and Regional Business Cycle Synchronization*

Selover¹,

Jensen²,

Kroll³

2005

J Regional Sci

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Business cycles in different regions of the United States tend to synchronize. This study investigates the reasons behind this synchronization of business cycles and the consequent formation of a national business cycle. Trade between regions may not be strong enough for one region to ''drive'' business cycle fluctuations in another region. This study suggests that regional business cycles synchronize due to a nonlinear ''mode-locking'' process in which weakly coupled oscillating systems (regions) tend to synchronize. There is no definitive test for mode-lock. However, simulations, correlations, Granger causality tests, tests for nonlinearities, vector autoregressions, and spectral analysis reveal modest econometric support for the regional mode-locking hypothesis of business cycle synchronization.

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“…The pattern of international technological specialization at any one point in time can be characterized by the distribution of an index of specialization X across technologies. Hence evaluating the dynamics of patterns of international technological specialization over time requires an analysis of the evolution of the entire cross‐sectional distribution of X , which can be modelled adopting a distribution dynamics approach (Quah , ,b,c).…”

Section: Modelling Of Technological Change and Specializationmentioning

confidence: 99%

“…This purpose is here achieved by applying distribution dynamics modelling (Quah , ,b,c) to the analysis of the evolution of the technological specialization profile of twelve industrial countries in the last two decades. Countries do not appear to be characterized by increasing specialization in a limited subset of technologies (a polarization towards the extreme values of the distribution representing the specialization pattern).…”

Section: Introductionmentioning

confidence: 99%

National Externalities and Path‐dependence in Technological Change: An Empirical Test

Mancusi

2011

Economica

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This paper provides an empirical assessment of the relevance of the hypothesis of increasing returns and path‐dependence in technological development by looking at its implications on the evolution of the technological specialization profiles of advanced countries. A recontracting process is used to formalize the idea that when national externalities are strong, countries should display the tendency to specialize in selected technologies. No evidence of such tendency towards increasing specialization is found in the data.

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Aggregate and Regional Disaggregate Fluctuations

Cited by 31 publications

References 30 publications

Identifying and Interpreting Regional Convergence Clusters Across Europe

Identifying and Interpreting Regional Convergence Clusters Across Europe

Mode-Locking and Regional Business Cycle Synchronization*

National Externalities and Path‐dependence in Technological Change: An Empirical Test

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