Regional Economic Cycles and the Texas Economy

Abstract

Most analyses of regional economies are based on some form of an export base model driven by exogenous factors determined outside the region. Typically, empirical versions are driven by national economic projections from large-scale and well-known macroeconomic models, such as those maintained by the Wharton School of Business at the University of Pennsylvania or by Data Resources Inc. in Washington, D.C. The problem is that the link between the national economy and regional economies can become very difficult to isolate. Often, the ups and downs of a regional economy do not coincide with other regions’ or with the national economy’s.