Abstract

The topic of regional economics and business cycles has attracted increasing attention in recent years. However, an analysis of the dynamics and the features of economic growth in different areas is hampered by the fact that official Italian GDP statistics at the regional level are not updated and have only an annual frequency. For this reason, we considered a high frequency and easily updatable Indicator of Regional Economic Activity that provides information on different dimensions of local business cycles and thus can be useful to policy makers. We propose a spatiotemporal hierarchical model of regional economic growth that isolates different sources of variability.