Title
The UK Intranational Trade Cyclek
Abstract
The paper uses annual data on real GDP for the UK regions and 12 manufacturing
sectors to derive regional and regional/sectoral business cycles using an H-P filter. The
cohesion of the cycles is examined via cross-correlations and comparisons made with the
regional cycles for Japan, the United States and the EuroArea. The UK emerges as especially
cohesive and efforts to explain the overall cross-correlations of regional GDP not very
successful owing to the low variance of the explicand; when attention is turned to the
sectoral/regional cycles, with their greater variance it is possible to demonstrate that
economic variables such as distance, dissimilarity in structure and level of output play a
significant role in explaining the variance in the cross-correlations. A significant feature of
the cross-correlations in relation to those of EU countries is that whilst they continue to
provide support for the "UK idiosyncrasy" they no longer do so as strongly as they did in
earlier data samples.
Michael ARTIS
University of Manchester and CEPR
Toshihiro OKUBO
Research Institute for Economics and Business Administration
Kobe University
Rokkodai-cho, Nada-ku, Kobe
657-8501
Japan
Phone: (81) 78 803 7036
Fax: (81) 78 803 7059