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Although the U.S. economy is in its eighth consecutive year of expansion since the Great Recession, some states are nevertheless in recession. The timing of states entering recession often differs from the nation as a whole. States with higher concentrations in specific sectors may enter downturns earlier than other states—and may remain in them longer. For example, energy-producing states in the Tenth Federal Reserve District entered a recession in 2015 and 2016 following a 70 percent decline in the price of oil. Most non-energy-producing states experienced steady growth over the same period. Jason P. Brown tests two approaches to determining whether the seven states of the Tenth District are in a recession: one approach is well suited for identifying state recession in retrospect, while the other is more helpful for identifying state recessions in real time. Both approaches suggest Oklahoma and Wyoming entered downturns in early to mid-2015, while only the second approach suggests Kansas and New Mexico entered recessions in late summer 2016. His results indicate that on average, recessions in energy-producing states occur more frequently but are typically shorter than recessions in non-energy-producing states.

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Publication information: First Quarter 2017

Author

Jason P. Brown

Research and Policy Officer

Jason Brown is a Research and Policy Officer in the Economic Research Department of the Federal Reserve Bank of Kansas City.  In this role, he coordinates the regional and commod…