The paper “Business cycle synchronization across U.S. states”, joint with Luis Aguiar-Conraria, Haukur Guðjónsson and Maria Joana Soares was accepted for publication in the B.E. Journal of Macroeconomics. In the paper we study how business cycles across U.S. states are synchronized with the aggregate cycle and between themselves. Our results show that U.S. states’ business cycles are well synchronized with the national business cycle, with only a few exceptions. The states furthest away from the coasts are the least synchronized. Alaska and Hawaii show this trend clearly, but it also shows up in the central region of the U.S., stretching from Oklahoma to North-Dakota.
It is also noteworthy that there is strong evidence the business cycles between states are becoming more synchronized with time.We also document that the closer the states are geographically the more synchronized their business cycles are and we find a strong and significant association between a state’s degree of industry specialization and its dissimilitude with the aggregate cycle, which is robust to sub-sample analysis.