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Identifying Canadian Regional Business Cycles using the Friedmand Plucking Model

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  • Gabriel Rodriguez

    (Department of Economics, University of Ottawa)

Abstract

Following the methodology used by Kim and Nelson (1999b), I find estimates of the permanent and transitory components for Canadian regions based on the Friedman model of business fluctuations. The empirical results support the theoretical predictions that negative transitory shocks hit the economy putting down the real regional output. After that, the regional economy enters in a recovery phase and after this it is operating again near to the trend ceiling level. Using the estimated filtered probabilities, a chronology of the regional business cycles is presented. It shows that there are clear and particular episodes corresponding to the regional dynamics which are not necessarily present at the aggregate level.

Suggested Citation

  • Gabriel Rodriguez, 2003. "Identifying Canadian Regional Business Cycles using the Friedmand Plucking Model," Working Papers 0309E, University of Ottawa, Department of Economics.
    • Handle: RePEc:ott:wpaper:0309e
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    References listed on IDEAS

    as
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    6. Lakdawalla, Darius & Sood, Neeraj, 2004. "Social insurance and the design of innovation incentives," Economics Letters, Elsevier, vol. 85(1), pages 57-61, October.
    7. Emmanuel Petrakis & Joanna Poyago‐Theotoky, 2002. "R&D Subsidies versus R&D Cooperation in a Duopoly with Spillovers and Pollution," Australian Economic Papers, Wiley Blackwell, vol. 41(1), pages 37-52, March.
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    9. Karolina Ekholm & Johan Torstensson, 1997. "High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 1184-1203, November.
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    More about this item

    Keywords

    Business Regional Fluctuations; Markov Switching; Transitory and Permanent Components;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • R00 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General - - - General

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