Regional economic modelling through an embedded econometric-interindustry framework

Authors

Ashkan Masouman, University of WollongongFollow
Charles Harvie, University of WollongongFollow

RIS ID

115590

Publication Details

Masouman, A. & Harvie, C. (2018). Regional economic modelling through an embedded econometric-interindustry framework. Regional Studies, 52 (9), 1237-1249.

Abstract

After the incorporation of an inter-industry analysis into an econometric framework was pioneered 40 years ago, there has been a growing number of studies in the literature focused on applying such an integrated framework at the subnational level. Models in the literature apply different strategies and structures to merge input-output (IO) and econometric models. The objective of the merged framework is to capitalize on the merits of both IO and time-series models. This paper presents an attempt to apply an intersectoral demand variable (ISDV) technique to embed IO analysis into a time-series model to investigate the economy of Illawarra in New South Wales, Australia. The result is a dynamic intersectoral model that provides high accuracy in forecasting sectoral employment.