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Comovements in Cities

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  • Shea, J.

Abstract

Recent research has shown that industries that locate together in space also move together over the business cycle, and that this correspondence between spatial and temporal comovement is important to aggregate volatility. This paper asks whether this correspondence is due to local common shocks or to local spillovers. I examine interindustry comovements within seven large US cities, and find strong evidence for local spillovers. I estimate that local spillovers explain roughly one-third of manufacturing employment volatility at the city level. Local spillovers do not appear to result from transport costs and locally traded goods.
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Suggested Citation

  • Shea, J., 1995. "Comovements in Cities," Working papers 9522, Wisconsin Madison - Social Systems.
    • Handle: RePEc:att:wimass:9522
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Alberto Franco Pozzolo, 2004. "Research and Development, Regional Spillovers and the Location of Economic Activities," Manchester School, University of Manchester, vol. 72(4), pages 463-482, July.
    2. Carlino, Gerald A. & DeFina, Robert H. & Sill, Keith, 2001. "Sectoral Shocks and Metropolitan Employment Growth," Journal of Urban Economics, Elsevier, vol. 50(3), pages 396-417, November.
    3. John Shea, 1995. "Complementarities and Comovements," NBER Working Papers 5305, National Bureau of Economic Research, Inc.
    4. Geoffrey Hewings, 2008. "On some conundra in regional science," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 42(2), pages 251-265, June.
    5. Baxter, Marianne & Kouparitsas, Michael A., 2005. "Determinants of business cycle comovement: a robust analysis," Journal of Monetary Economics, Elsevier, vol. 52(1), pages 113-157, January.
    6. Marianne Baxter & Michael A. Kouparitsas, 2005. "What determines bilateral trade flows?," Working Paper Series WP-05-11, Federal Reserve Bank of Chicago.

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    More about this item

    Keywords

    CITIES; ECONOMETRICS; BUSINESS CYCLES;
    All these keywords.

    JEL classification:

    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes

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