Identifier

etd-04242012-061201

Degree

Doctor of Philosophy (PhD)

Department

Economics

Document Type

Dissertation

Abstract

A key element of this dissertation is the examination of the regional and state level effects of monetary policy. The first essay compares two broad approaches to identifying the monetary policy shocks that are used to estimate the regional effects of monetary policy. One approach that has been used in the previous literature assumes that monetary policymakers respond to shocks to regional personal income but do not respond directly to shocks to national income. A second general approach assumes that monetary policymakers respond to shocks to national income but do not respond directly to region-specific income shocks. This assumption is based on descriptions of monetary policymaking that policymakers focus on the national economy and use regional information as a gauge to measure the national economy. The results show that the effects of monetary policy shocks on regional income differ across the two broad approaches to identifying policy shocks. Therefore, assumptions about whether monetary policymakers respond directly to regional shocks seem to matter for estimating the regional effects of monetary policy. In the second essay, the analysis of the effects of monetary policy is extended to the state level. Using the same methods as in the first essay, we investigate whether responses of state-level income to monetary policy differ from one state to another, whether responses of state-level income differ from the region’s overall response, and whether the method of identifying policy shocks matters. Comparisons of states’ responses to monetary policy shocks show that each state’s response is sometimes quite different from the response of the other states in that region and from the overall response of its region. In the third essay, the robustness of the results in the first two chapters to the specification of model and the use of alternative definitions of national output are examined.

Date

2012

Document Availability at the Time of Submission

Release the entire work immediately for access worldwide.

Committee Chair

McMillin, William D

Included in

Economics Commons

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