Loscos, Ana Gomez Gadea, M. Dolores Montañes, Antonio
Year of Publication:
51st Congress of the European Regional Science Association: "New Challenges for European Regions and Urban Areas in a Globalised World", 30 August - 3 September 2011, Barcelona, Spain
This paper sets out a comprehensive framework to identify regional business cycles within Spain and analyses their stylised features and the degree of synchronization present among them and the Spanish economy. We show that the regional cycles are quite heterogeneous although they display some degree of synchronization that can be partially explained using macroeconomic variables. We also propose a dynamic factor model to cluster the regional comovements and Ã-nd out if the country cycle is simply the aggregation of the regional ones. We Ã-nd that the Spanish business cycle is not shared by the seventeen regions, but is the sum of the diÂ§erent regional behaviours. The implications derived from our results are useful both for policy makers and analysts.