| Abstract: | ABSTRACT. Many rural regions are characterized by unstable economies. Studies that investigate economic instability in these regions, however, tend to examine the effects rather than causes of its occurrence. Efforts to diminish instability can only be successful if they address its sources. Using an input-output model, a conceptual decomposition of the variance of gross output is used as a means of identifying supply and demand sources of instability. This framework can be used for empirical investigations into the causes of economic instability, and for the design of stabilization policies. Data limitations, however, may preclude some applications of the technique. |
