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Business Cycle Downturn Estimation For Ciudad Juarez: 1991-2022, Steven L. Fullerton, Thomas M. Fullerton Jr.
Business Cycle Downturn Estimation For Ciudad Juarez: 1991-2022, Steven L. Fullerton, Thomas M. Fullerton Jr.
Border Region Modeling Project
A monthly frequency metropolitan business cycle downturn likelihood equation is estimated for Ciudad Juarez. The binary index of economic conditions is based upon monthly IMMEX export oriented manufacturing employment. A dynamic probit methodology is used for parameter estimation. Continuous explanatory variables include a 1-year minus 1-month Mexico interest rate spread, a 2015 = 100 weighted real exchange rate index, and a 10-year minus 3-month USA interest rate spread. Parameter estimation results confirm the various hypotheses examined. However, model simulation outcomes are less favorable with the results indicating that accurate forecasting of the post-2010 business cycles may require additional refinement to …