ABSTRACTNonstationary behavior in regional economies must be recognized and categorized before activity indicators can be properly used in analyses. The nonstationary behavior of gross product by one‐digit industry and personal income from all of the 50 states is examined. Tests to discriminate between stochastic and deterministic trends are pursued and the results indicate that the former dominate the latter. State‐nation linkages in the presence of stochastic trends are explored and it is shown that stable, long‐term relationships between nonstationary state and national outputs are rare at both the industry and aggregate l