Abstract
The purpose of this paper is to determine the feasibility of a regional stabilization policy designed to combat unemployment and depressed levels of output in a highly cyclical region such as the state of Ohio which exhibits the third greatest cyclical sensitivity among the states to US business cycles. An econometric model of Ohio is subjected to a set of macrostatic and macrodynamic decision rules. The results show that the output of Ohio can be increased in a national recession by a choice of instrumental variables, over which state government officials have partial or complete control.
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