A Parsimonious Error Correction Model of Kansas Economic Activity

Or “Kansas macro crash…and burn”

Patrick Marvin argues that Kansas is doing fine, and the tax cuts just need a bit more time to kick in to spur the economy. My reading of the data and estimates suggest otherwise.

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Figure 1: Coincident index for Kansas, March release (dark blue), April release (bold teal). Dark blue triangle (solid teal box) denote corresponding forecasts from March and April releases of leading indices. Source: Philadelphia Fed (coincident), Philadelphia Fed (leading), and author’s calculations.

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