EXPORTS CONTRIBUTION TO ECONOMIC-GROWTH - EMPIRICAL-EVIDENCE FOR CALIFORNIA, MASSACHUSETTS, AND TEXAS, USING EMPLOYMENT DATA

The paper shows an interregional trade model from which testable param eter restrictions for economic base theory, shown to be equivalent to the hypotheses of the Granger causality test, are derived. The results of the tests for three states, based on various bifurcation methods, suggest that economic base theory holds strongly for the crudest defin ition of the base, but not for others. The frequency analysis indicate s a likely association between inherent cyclicalities in employment gr owth data and economic base theory. The regional multipliers and the t iming of economic adjustments to exogenous shocks are also discussed.