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Metropolitan Business Cycle Analysis For Lubbock, Thomas M. Fullerton Jr., Macie Z. Subia
Metropolitan Business Cycle Analysis For Lubbock, Thomas M. Fullerton Jr., Macie Z. Subia
Departmental Papers (E & F)
This study develops a business cycle index (BCI) for Lubbock Metropolitan Statistical Area (MSA). The Stock & Watson (1989; 1991; 1993) methodology is used to develop the BCI and assumes that the co-movements of key economic indicators have a single underlying, unobservable factor. This factor is extracted from the indicators and used to calculate an index that represents economic conditions through an econometric approach. The model uses the Kalman filter smoothing approach which smooths across variables and over time. This results in an index that is smoother with less pronounced expansions and recessions. Indicator series used for the study are: …