State price indices! Get em while they're hot!


Martin Beraja, Erik Hurst, and Juan Ospina have constructed state price indices from retail scanner data! That's pretty badass. Nice job, guys.

I don't know what state-level price indices already exist, but these look pretty good, so if you need state-level price data for your research, you might want to mail these guys! It's only from 2006, of course, and it's biased because it only includes stuff that people buy in stores.

Anyway, Beraja et al. use their state-level data to help make a model of regional shocks. (I don't really believe the model that much, but that's not the point.) This kind of micro-flavored macro - "dissagregated" macro, if you will - seems to be getting more important. I've heard a number of other macro folks talk about making these sorts of models, and there seems to be a lot more focus on collecting region-, industry-, and firm-specific data. Related trends include models with heterogeneity, network models, and institutional models (for example, this one that I just saw presented).

That's cool. A lot of macro people seem to have woken up to the fact that their old model paradigms (NK, RBC, and the like) weren't really working, and new stuff is needed. And also, at the same time, woken up to the fact that the available data aren't very informative. The new micro-focused macro models, and new data sets, seem to be ways of trying to chip away at the problem. The new stuff hasn't taken over yet, but it's spreading.

Also, Beraja et al.'s data set demonstrates quite clearly how the IT revolution has dramatically increased data availability. I think everyone realizes that that's the big force changing econ right now.

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