Document Type

Working Paper

Publication Date


Working Paper Number

WP #14031, October 2014


This study submits eleven business climate indexes to tests of their ability to predict relative economic performance on either side of state borders. Our results show that most business climate indexes have no ability to predict relative economic growth regardless of how growth is measured. Some are negatively correlated with relative growth. Many are better at reporting past growth than at predicting the future. In the end, the most predictive business climate index is the Grant Thornton Index which was discontinued in 1989.

Publication Status

Forthcoming in Journal of Regional Science.

JEL Classification

O4, R1

File Format



38 pages

Included in

Economics Commons