Modelling Regional Fluctuations of the New York State Economy
This dissertation examines employment fluctuations in New York State, and the inter-relationship between employment of New York State and that of the US. New York State suffered more severe downfalls during the economic recessions of 1991 and of 2001, compared to the national experience. To understand these rapid economic fluctuations of New York State better, the dissertation addresses the following questions: (1) what are the determinants of employment growth? (2) how did export grow in New York State? (3) how do NYS industries differ in terms of trade-related factors? (4) are there permanently common components between NYS employment and US employment fluctuations? and (5) how did each industry sector contribute to total employment fluctuations in New York State? Using cross-sectional analysis of 51 states, the study finds that export growth may explain employment growth with the same magnitude as the domestic demand potential. Shift-share analysis suggests that the industry mix effects appear as the main source of regional competitiveness in export growth. The dissertation also examines the relationship between New York State and US economic fluctuations by decomposing common trends and cyclical components with VECM. The result indicates a single co-integrating relationship between employment in NYS and in the US, suggesting that NYS and US employment appear to have common trends. The dissertation finally uses various VAR models to analyze sectoral fluctuations in New York State employment. The main points of inquiry are the contribution of each sector on regional employment, the role of regional export, and the possible interaction between each industry sector. The estimation result suggests that NY State shocks are more important than US shocks in determining NY State employment. It finds that the contribution of NYS export is relatively small and the cross-industry effect does not significantly affect the analysis. In general, sectoral analysis of NYS employment is more sensitive to the time period chosen than to addition of NYS export effect and cross-industry effect. National shock becomes more important after recession than before recession. This is more conspicuous in some industrial sectors such as manufacturing, education and health, information, government, and finance.
regional economy; fluctuation sources