A0314
Title: A restricted FAVAR for regional analysis of tariff uncertainty
Authors: Laura Jackson Young - Bentley University (United States) [presenting]
Michael Owyang - Federal Reserve Bank of St Louis (United States)
Abstract: A factor-augmented VAR (FAVAR) is estimated, using a panel of quarterly state- and national-level data to examine how uncertainty related to tariff policy influences state-level economic conditions. The model includes three types of factors: A national factor, regional factors that model the correlation within a particular BEA region, and state-level factors that model the correlation across variables within a particular state. Measures of tariff volatility are included, and the impulse responses of state-level employment, unemployment, hours, and labor force participation are considered.
