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The B.E. Journal of Macroeconomics

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Business cycle synchronization across U.S. states

Luís Aguiar-Conraria
  • Universidade do Minho, NIPE and Departamento de Economia, Largo do Paço, 4704-553 Braga, Portugal
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/ Pedro Brinca
  • Corresponding author
  • Nova School of Business and Economics, Lisbon, Portugal
  • University of Porto, Faculty of Economics, CEF.UP, Porto, Portugal
  • Email
  • Other articles by this author:
  • De Gruyter OnlineGoogle Scholar
/ Haukur Viðar Guðjónsson / Maria Joana Soares
  • Universidade do Minho, NIPE and Departmento de Matemática e Aplicações, Largo do Paço, 4704-553 Braga, Portugal
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Published Online: 2016-06-08 | DOI: https://doi.org/10.1515/bejm-2015-0158


We use wavelet analysis to conclude that individual U.S. states’ business cycles are very well synchronized. We also find evidence of a strong and significant correlation between business cycle dissimilitudes and the distance between each pair of states, consistent to gravity type mechanisms where distance affects trade. Trade, in turn, increases business cycle synchronization, while a higher degree of industry specialization is associated with a higher dissimilitude of the state cycle with the aggregate economy. Finally, there is evidence that business cycle dissimilitudes have been decreasing with time, consistent with the previous findings coupled with the idea that information and communications technology make distances smaller.

Keywords: business cycle synchronization; continuous wavelet transform; trade

JEL Classification: E37; E52; R11


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About the article

Published Online: 2016-06-08

Citation Information: The B.E. Journal of Macroeconomics, Volume 17, Issue 1, 20150158, ISSN (Online) 1935-1690, ISSN (Print) 2194-6116, DOI: https://doi.org/10.1515/bejm-2015-0158.

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