This paper examines the relative importance of external shocks, macroeconomic shocks, national and regional shocks as sources of output fluctuations within the Indonesia’s economy, and identifies dynamic responses of the local output to the disturbances. Using vector autoregression models (VARs), it reveals that national shocks including macroeconomic shocks explain a large share of Indonesian regional fluctuations, albeit the regional responses to common disturbances still indicate some degrees of variations. Over time the regional economic cycles tend to be more closely synchronized with the national cycle, and thus may provide some indications of a greater economic and monetary integration.