Regional Econometric Models: Specification and Simulation of a Quarterly Alternative for Small Regions

Incorporating labour market structure in regional econometric models

“…However, the other results were very pleasing, especially in view of the level of disaggregation in the model. These forecast results compare well with the more aggregated Downloaded by [University of Newcastle, Australia] at 07:15 05 January 2015 Latham, Lewis and Landon (1979). The forecasting results also compare well with those of Beyers (1972) which exhibited errors in excess of 70% (Conway, 1975).…”

“…Input-output models stress the interdependence of industries within regions and are, of course, production function oriented (Isard, 1960). Econometric regional models frequently 'miniaturize' macroeconomic specifications but, in general, vary highly in structure (Adams et al, 1975;Glickman, 1977;Hall and Licari, 1974;and Latham et al, 1979). More recently, regional models have tended to merge elements of these three approaches.…”

“…Many regional/state models concerned with development and growth have concentrated on employment relationships in recent years (e.g. Latham et al, 1979;Hoehn, 1984). The growth and development questions which have resulted in these specifications have been concerned with employment effects across industries and also with the projection of employment conditioned on alternative external economic features and state or region oriented policies.…”

Decomposition of Ex Ante State Model Forecasting Errors

“…Since the former embodies reverberative as well as regression error and the latter precludes exogenous variable error, the comparative MAPE's indicate the magnitude of stability error. Ex post MAPE's for total employment and state tax revenues are 47 and 225 percent greater than their respective in-sample simulation MAPE's in Latham, Lewis, and Landon's (1979) model of Delaware. Glickman's (1977) errors in his Philadelphia model increase an average of 157 percent in going from 1955-1971in-sample MAPE's to 1972-1974 ex post sample MAPE's (for those variables with reported 1972-1974 forecast values).…”

Banking Deregulation as an Economic Development Policy Tool

“…Average state wages are assumed to be inversely related to unemployment and directly relate to the price level: WD = WD(U,P, S,S2, S3); aWD/lU < 0, awD/aP > 0, (4) where P is the CPI. '1 Again, partial adjustment to long-run equilibrium is assumed.…”