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Thomas Grennes, Pablo Guerron-quintana and Asli Leblebicioglu
''Economic Development and Volatility among the States''
( 2010, Vol. 30 No.3 )
Using state level personal income, we empirically demonstrate the importance of economic development and diversification for the changes in volatility. We show that volatility of income growth is initially decreasing in the level of income and the degree of diversification. Yet, as state income continues rising, its volatility starts increasing. We also find that expansion of interstate banking and the size of the service sector are among the factors that have influenced volatility.
Keywords: State Level Moderation, Economic Development, Specialization
JEL: O1 - Economic Development: General
E3 - Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data)
Manuscript Received : Jun 18 2010 Manuscript Accepted : Jul 27 2010

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