Abstract: Paper No. 195
A Time-Series Econometric Model of the Upstate New York Economy
Donald H. Dutkowsky, James Follain and Seth Giertz
In this paper, a time-series econometric model of the Upstate New York economy and two of the metropolitan areas within it (Albany and Syracuse) is developed. In order to incorporate the dynamic nature of the local economy, a VAR estimation technique is employed. This framework is then used to generate shortrun quarterly employment forecasts for each of the regions. Additionally, the relationship between housing prices and employment is investigated. Housing prices are, in part, a reflection of expectations of future economic activity because they are, in theory, the present value of expected future income. As such, they may serve as a predictor of future economic activity. Several models are investigated to shed light on the strength of this relationship.
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