Forecasting Structural Change With a Regional Econometric Input-Output Model
Abstract:The sophistication of regional economic models has been demonstrated in numerous ways, most recently in the form of linking several modeling systems or in the expansion in the number of equations that can be manipulated successfully to produce impact analyses or forecasts. In this paper, an alternative perspective is employed. What do regional macro-level forecasts indicate about the process of structural change? A new methodology is illustrated that enables analysts to make forecasts of detailed structural change in the interindustry relations in an economy. Using a regional econometric input-output model developed for the Chicago metropolitan region, derived input-output tables are extracted for the period 1975–2016. These tables are then analyzed to determine the forecasted direction of structural changes for the region. The innovation illustrated here is based on a model that exploits the general equilibrium spirit of computable general equilibrium models through the adjustment of input coefficients to clear markets.
Document Type: Original Article
Affiliations: 1: Regional Economics Applications Laboratory, Federal Reserve Bank of Chicago, 230 S La Salle, Chicago, IL 60604-1413, U.S.A., firstname.lastname@example.org 2: Regional Economics Applications Laboratory, University of Illinois, 607 S. Mathews, Urbana, IL 61801-3671, U.S.A., 3: Regional Economics Applications Laboratory, University of Illinois, 607 S. Mathews, Urbana, IL 61801-3671 and Bar Ilan University, Ramat Gan, Israel, 4: Regional Economics Applications Laboratory, University of Illinois, 607 S. Mathews, Urbana, IL 61801-3671, U.S.A.
Publication date: November 1, 1997