Regional Data in Macroeconomics: Some Advice for Practitioners


Chodorow-Reich, Gabriel. 2020. “Regional Data in Macroeconomics: Some Advice for Practitioners.” Journal of Economic Dynamics and Control 115.
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Cross-sectional or panel studies have joined time series techniques as an important element in empirical macroeconomists' toolkit. The econometric best practices for these studies and their aggregate implications remain active topics of research. In this paper, I offer several pieces of advice for practitioners in this literature. I begin by casting regional analysis in a Rubin (1978) potential outcomes framework. Using this framework, I discuss the importance of contamination of other areas through spillovers and how to make inference about aggregate responses based on regional variation. I then turn to econometric issues including the choice of endogenous variable in a regional regression and whether or not to weight by population. 

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Last updated on 03/26/2021