U.S. Regional Business Cycles and the Natural Rate of Unemployment (ICPSR 1296)

Version Date: Aug 12, 2004

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Principal Investigator(s):
Howard J. Wall, Federal Reserve Bank of St. Louis; Gylfi Zoega, University of Iceland. University of London. Central Bank of Iceland

https://doi.org/10.3886/ICPSR01296.v1

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Summary

Estimates of the natural rate of unemployment are important in many macroeconomic models used by economists and policy advisors. This paper shows how such estimates might benefit from closer attention to regional developments. Regional business cycles do not move in lock-step, and greater dispersion among regions can affect estimates of the natural rate of unemployment. There is microeconomic evidence that employers are more reluctant to cut wages than they are to raise them. Accordingly, the relationship between wage inflation and vacancies is convex: An increase in vacancies raises wage inflation at an increasing rate. The authors' empirical results are consistent with this and indicate that if all else had remained constant, the reduction in the dispersion of regional unemployment rates between 1982 and 2000 would have meant a two-percentage-point drop in the natural rate of aggregate unemployment.

Citation

Wall, Howard J., and Zoega, Gylfi. U.S. Regional Business Cycles and the Natural Rate of Unemployment. Inter-university Consortium for Political and Social Research [distributor], 2004-08-12. https://doi.org/10.3886/ICPSR01296.v1

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Distributor(s)

Inter-university Consortium for Political and Social Research
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Data Collection Notes

  1. Files submitted are data file 0401hwd.xls and the program file 0401hwp.txt. These data are part of ICPSR's Publication-Related Archive and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

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Original Release Date

2004-08-12

Version History

2018-02-15 The citation of this study may have changed due to the new version control system that has been implemented. The previous citation was:

  • Wall, Howard J., and Gylfi Zoega. U.S. Regional Business Cycles and the Natural Rate of Unemployment. ICPSR01296-v1. Ann Arbor, MI: Inter-university Consortium for Political and Social Research [distributor], 2004-08-12. http://doi.org/10.3886/ICPSR01296.v1

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Notes

  • These data are flagged as replication datasets and are distributed exactly as they arrived from the data depositor. ICPSR has not checked or processed this material. Users should consult the investigator(s) if further information is desired.

  • The public-use data files in this collection are available for access by the general public. Access does not require affiliation with an ICPSR member institution.