A working paper by Professor Menzie Chinn and Ryan LeCloux (MIPA ’18), Chinn’s project assistant during the 2017–18 academic year, discusses the challenges to assessing the economic outlook at the state level. They found that the recently introduced quarterly gross domestic product (GDP) series allows analysts to examine business cycle developments in state-level economies better than previously possible.
Tracking the State Economies at High Frequency: A Primer identifies data available to researchers interested in evaluating the course of the economy, particularly in response to particular shocks. After reviewing the sources of high frequency data, they assess the correlation and co-movement of various macroeconomic indicators and provide one example of how researchers use high frequency data to assess indirectly the impact of economic policies.
“My assistantship greatly developed my data analysis skills and gave me the opportunity to utilize my stats skills in a real-world setting,” said LeCloux, who joined the Wisconsin Legislative Reference Bureau in July as a research analyst.
“It taught me that while data and metrics are useful tools for analyzing issues such as economic prosperity, they are by no means perfect measures and should be viewed with some skepticism,” LeCloux said.
In a follow-up post on his Econbrowser blog, Chinn used five macroeconomic measures to evaluate Minnesota’s economic performance in relation to Wisconsin’s: gross domestic product, personal income, nonfarm payroll employment, civilian employment, and coincident indices and ”adjusted” coincident indices.
“La Follette School project assistantships have proven invaluable to research,” Chinn said. “In addition to providing an additional channel to provide advice on how to conduct research, Ryan benefitted from assistance in researching financial predictors of recession, the relationship between exchange rates and trade deficits, and how interest rates and exchange rates interact.”