Regional economies: separating trends from cycles

The various regions of the United States, although linked, respond differently to changing economic circumstances. Traditional approaches to understanding these different reactions have relied on the assumption that long-run trends in regional income or employment are constant. Recently, many economists have adopted the view that trends also change during business cycles. Using a new technique, Jerry Carlino and Keith Sill distinguished changing trends from cycles in the eight major regions of the United States and identified regions that have similar cycles. In this article, they share their results