Forward-looking and myopic regional Computable General Equilibrium models: How significant is the distinction?

Abstract

We present a stylized intertemporal forward-looking model able that accommodates key regional economic features, an area where the literature is not well developed. The main difference, from the standard applications, is the role of saving and its implication for the balance of payments. Though maintaining dynamic forward-looking behaviour for agents, the rate of private saving is exogenously determined and so no neoclassical financial adjustment is needed. Also, we focus on the similarities and the differences between myopic and forwardlooking models, highlighting the divergences among the main adjustment equations and the resulting simulation outcomes.JEL classification: C68; D58; D91; R10

How much does a single graduation cohort from further education colleges contribute to an open regional economy?

“…Population is taken to be fixed implying that the inter-regional migration function is turned off. Detailed discussion of the AMOS model and the underlying structural equations are available in Harrigan et al (1991) for the basic variant and in Lecca et al (2013Lecca et al ( , 2014 for the inter-temporal extensions. The model is calibrated to a Scottish Social Accounting Matrix (SAM) for 2006.…”

“…In the version of the model used in this paper, consumption and investment decisions reflect inter-temporal optimization with perfect foresight (Lecca et al, 2013. In the period-by-period simulations each period is taken to be a year.…”

The Regional Economic Impact of More Graduates in the Labour Market: A ‘Micro-to-Macro’ Analysis for Scotland

“…In this version of the model, consumption and investment decisions reflect inter-temporal optimization with perfect foresight (Lecca et al, 2010(Lecca et al, , 2011. However, for comparative purposes we also report the results of the myopic version of the model, which has a recursive dynamic structure, since this yields some interesting differences in terms of the short-run employment responses to productivity enhancements.…”

“…Detailed discussion of the model and underlying algebraic structure are available in Harrigan et al (1991) for the myopic variant and in Lecca et al (2010Lecca et al ( , 2011 for the inter-temporal version of AMOS. The model is calibrated to a purpose-built, HEI-disaggregated IO table and Social Accounting Matrix (SAM) for 2006.…”

A robust data-driven macro-socioeconomic-energy model

“…Elasticities of substitution determine how far producers substitute between inputs in response to changes in relative prices. Calibration of static CGE models typically depends on data for a single year, and as such they represent structural transitions poorly, but this can be overcome by a dynamic CGE framework (Harrison et al, 2000;Lecca et al, 2013). A sequence of single-period equilibria can be linked through stock-flow relationships so that computed equilibria vary over time as the value for the model's stock variables adjust, thus endogenising growth (Dixon and Rimmer, 2002).…”