| This thesis examines the sensitivity of the Nevada economy to national monetary policy using standard time series modeling techniques. The period of analysis is 1980 through 2000. The central exercise is to carry out an unrestricted vector autoregression (VAR), using the results from the associated impulse response functions and variance decomposition to measure the impact of changes in the federal funds interest rate on economic activity in Nevada.; After estimating the model and tracing out the impulse response functions, it is evident that monetary policy has affected the state economy. The results showed that the fed funds variable had more of an impact on Washoe County and less on Clark County. The California variable explained significant portions of each county and economic activity in the entire state. Overall, the Industrial Production variable explained the highest portion of variation for Washoe County, Clark County, the entire state, and the rest of state. |
