Measuring regional manufacturing production: An analysis for the Spanish regions

In a big amount of economies (NUTS-I) the evolution of manufacturing production is analysed using Gross Domestic Product (GDP) and Gross Added Value (GAV) data from National Accounts. In Spain, the problem of using these data is that they are not available as soon as it would be desirable. In consequence, it is not possible to analyse the short term evolution of the industrial output through them. To solve these problems the Institute of Statistics of Spain (Instituto Nacional de Estadistica -INE-) constructs a monthly Industrial Production Index (IPI) from data belonging to a survey addressed to firms. At a regional level (NUTS-II), the difficulties to monitor the evolution of manufacturing production are even bigger due to the nearly absence of official data. During the last years, different public and private institutions have started to construct indices for some Spanish regions, but they do not use an homogeneus methodology and the indices are not directly comparable. In this paper, we summarize and extent the main results of previous studies about the possibility of using different indirect methods to analyse the short term evolution of regional industrial production. In concrete, two statistic and an econometric method are considered. First, we study the possibility of extending the methodology proposed by the Regional Institute of Statistics of Catalonia (Institut d'Estadistica de Catalunya -IEC-) to other Spanish Regions. Second, we analyse the relationships between electric energy consumption for industrial purposes and industrial production. Third, following Israilevich and Kuttner (1993), we apply a state-space model to obtain estimates of the industrial production indices using the Kalman Filter and the method of maximum likelihood. Next, to validate the indices obtained through these three methods we compare them with regional indices obtained by direct methods for the regions where they exist. Finally, we expose the main conclusions remarking the implications for public policy in relation with elaboration of regional statistics.

Specialization in Europe and asymmetric shocks: Potential risks of EMU

One of the most obvious consequences of a monetary union is that monetary policy is lost as an instrument of national macroeconomic policy. The loss of the exchange rate as a national policy instrument has important implications for macroeconomic stability in the presence of asymmetric shocks, unexpected shocks that do not affect every nation in an equal way. The empirical literature on Optimum Currency Areas has concluded that the probability of asymmetric shocks to occur at a national level has tended to diminish in the Economic and Monetary Union (EMU) as a result of the intensification of the integration process during the most recent years. Therefore, since Economic Geography Theories predict an increasing specialisation of regions as a result of reallocation of industrial activity, the degree of asymmetry of industry-specific shocks will be specially relevant to determine if benefits overweight the costs associated to EMU. Previous studies, such as Bayoumi and Eichengreen (1995), Helg et al. (1995) or Ghosh and Wolf (1997), have examined to what extent sectoral asymmetric shocks have been relevant in the past using, mainly, static measures of asymmetries such as the correlation coefficients between series of sectoral shocks previously calculated from VAR or sVAR models (Blanchard and Quah, 1989; Blanchard and Katz, 1992). In this paper, we study the evolution of industry-specific asymmetries in Europe from a dynamic point of view (applying the methodology proposed by Boone, 1997) in order to obtain new evidence about the potential risks of EMU in the scenario proposed by Economic Geography Theories.

Una anàlisi metodològica pel seguiment conjuntural de l'activitat industrial de les regions espanyoles

[spa] Dada la importancia del sector industrial para caracterizar las economías, la disponibilidad de un indicador con el que poder llevar a cabo un seguimiento a corto plazo de la actividad industrial es de gran utilidad. Así pues, en la tesis doctoral se analizan diferentes metodologías utilizadas en el ámbito regional: aproximar la producción industrial mediante el consumo de energía eléctrica para usos industriales y el método del IEC/INE consistente en censurar y estratificar las series de IPI sectoriales de la economía española. Las conclusiones a las que se llega en esta primera parte dela tesis llevan a proponer un método para la elaboración de IPI regionales: se trata de un modelo de frecuencia mixta específicado en términos de un modelo State-Space y estimado mediante el filtro de Kalman

A state-space approach for measuring regional manufacturing production indices

In this paper we propose a latent variable model, in the spirit of Israilevich and Kuttner (1993), to measure regional manufacturing production. To test the validity of the proposed methodology, we have applied it for those Spanish regions that have a direct quantitative index. The results demonstrate the accuracy of the methodology proposed and show that it can overcome some of the difficulties of the indirect method applied by the INE, the Spanish National Institute of Statistics

Unemployment forecasts, time varying coefficient models and the Okun's law in Spanish regions

During the Great Recession, output and unemployment responses have differed markedly across Spanish regions. Our objective is to evaluate the relative accuracy of forecasting models based on the Okun's law compared to alternative approaches. In particular, we want to analyse if a time varying coefficient specification of the Okun's law provide better forecasts than alternative models in two different periods: a first period from 2002 to 2007 characterized by sustained economic growth in all provinces, and a second period from 2008 to 2013 characterized by the impact of the Great Recession. The obtained results allow us to conclude that, in general, the use of these models improve the forecasting capacity in most regions, but do not provide reliable forecast

Comparación de la capacidad predictiva de los modelos de coeficientes fijos frente a variables en los modelos econométricos regionales: un análisis para Cataluña

Durante las últimas décadas se ha producido un creciente interés en nuestro país en relación a las economías regionales dada la necesidad de los gobiernos regionales de obtener información sobre sus economías para así llevar a cabo actuaciones de política económica más efectivas y eficientes. En este marco, los modelos econométricos constituyen una herramienta de utilidad puesto que ofrecen información sobre las relaciones estructurales que se dan en una economía y permiten predecir su evolución. Sin embargo, la utilización de dichos modelos con finalidad predictiva se enfrenta al inconveniente de la elevada inestabilidad a corto plazo que se produce en las relaciones entre variables económicas a nivel regional. Por este motivo, en el presente trabajo se propone la utilización de un modelo de coeficientes variables para recoger dicha inestabilidad y mejorar las predicciones sobre la evolución de las variables del bloque de producción de la economía catalana. Para contrastar la mejora obtenida a partir de la aplicación de dicho modelo, se compara su capacidad predictiva con la de un modelo de coeficientes fijos. Los resultados muestran un mejor comportamiento del modelo de coeficientes variables frente al modelo de coeficientes fijos

A dynamic analysis of asymmetric shocks in EU manufacturing

Available empirical evidence regarding the degree of symmetry between European economies in the context of Monetary Unification is not conclusive. This paper offers new empirical evidence concerning this issue related to the manufacturing sector. Instead of using a static approach as most empirical studies do, we analyse the dynamic evolution of shock symmetry using a state-space model. The results show a clear reduction of asymmetries in terms of demand shocks between 1975 and 1996, with an increase in terms of supply shocks at the end of the period