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The growth of globalisation in recent decades has increased the importance of external factors as drivers of the business cycle in many countries. Globalisation affects countries not just at the macro level but at the level of states and metro areas as well. The paper presented in this seminar isolates the relative importance of global, national and region-specific shocks as drivers of the business cycle in individual US states and metro areas.
The author finds about two thirds and a half of the employment fluctuations in US states and metro areas, respectively, are explained by the global and national shocks lumped together. The split between the importance of the global and national shocks is about 50:50, based on the standard identification scheme in the literature.
Alexander Chudik joined the Dallas Fed in November 2011. His main research interests lie in the fields of open economy macroeconomics and econometrics. He has worked on a variety of topics, including macroeconomic modeling with a global perspective, transmission of shocks in high-dimensional systems, cross-section dependence, aggregation, global imbalances and exchange rate determination. Alexander was previously employed at the European Central Bank, the International Monetary Fund and the ING Bank. He holds a PhD in economics from the University of Cambridge.
The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.