NEOCLASSICAL AND KEYNESIAN PERSPECTIVES ON THE REGIONAL MACRO-ECONOMY: A COMPUTABLE GENERAL EQUILIBRIUM APPROACH*

ABSTRACT Regional economic models typically either ignore prices altogether or simply treat them as exogenously determined. An unfortunate consequence of the neglect of prices is that model builders have been very much limited in the range of macroeconomic perspectives they have been able to bring to bear on regional economic issues. In this paper, we first explain how prices can be modeled endogenously at a regional level despite the paucity of data on regional prices. Using an illustrative interregional computable general equilibrium model for Malaysia, we then demonstrate how alternative macroeconomic visions of regional systems may be captured.     

Exports' Contribution to Economic Growth: Empirical Evidence for California,Massachusetts, and Texas,Using Employment Data

The paper shows an interregional trade model from which testable parameter restrictions for economic base theory, shown to be equivalent to the hypotheses of the Granger causality test, are derived. The results of the tests for three states, based on various bifurcation methods, suggest that economic base theory holds strongly for the crudest definition of the base, but not for others. The frequency analysis indicates a likely association between inherent cyclicalities in employment growth data and economic base theory. The regional multipliers and the timing of economic adjustments to exogenous shocks are also discussed.     

A LINEAR PROGRAMMING APPROACH TO SOLVING INFEASIBLE RAS PROBLEMS

ABSTRACT The RAS procedure is widely used to update national and regional input-output tables and international trade tables and to construct regional tables from national ones. Special problems, however, have been encountered when the procedure is used to adjust interregional trade tables. In this paper, the special properties of interregional trade tables that increase the likelihood of nonconvergence of the RAS procedure are discussed, and two linear programming methods of solving infeasible RAS problems are provided. First, a closed linear programming approach, which enables exogenous information to override the purely mechanical solution of infeasible RAS problems, is presented. Finally, the open linear programming approach is applied successfully to adjust U.S. interregional trade data that had previously failed to converge using the RAS procedure.     

Regional embeddedness,relatedness and inter-regional linkages among less developed regions in Central Europe

This paper aims at a comprehension of existing intra-/inter-regional production flows in a dynamically transforming, export-oriented economy in Central Europe. Drawing on evolutionary economic geography combined with input–output approaches, we have assessed the sectoral compositions and relationships between regions from a buyer-supplier interactions perspective. Inspired by contemporary literature we applied concepts of regional embeddedness, relatedness and vertically related variety. Conceptually we argue that the degree of embeddedness of regions is differentiated and spatially non-random. The differences will depend to a large extent on the economic characteristics and on the ability of key actors and institutions in these regions to respond actively to changing opportunities and threats. Empirically we have found: that economically more developed regions are relatively more embedded in terms of production flows and have greater sectoral variety, whereas regions with high export-dependence are economically backward, and have higher concentration of industry and negative associations with innovation activity and overall innovation potential. The intensity of interregional production flows increases as the regional economies vary more from each other, but beyond a certain level of structural difference the rate of mutual flows decreases; and that the intensity of interregional relations depends on the relatedness of the economic bases.     

ESTIMATING INTERREGIONAL UTILITY DIFFERENTIALS*

ABSTRACT The major objective of this paper is to estimate regional utility levels based on interregional migration data. We first revealed three stylized facts concerning migration behavior by examining long‐term Japanese data on interregional migration. We then uncovered inconsistency between net migration and utility differential in the presence of distance‐related migration costs. Based on the stylized facts and the inconsistency problem, we formulated an operational model and estimated interregional utility differentials. We showed that the interregional utility differentials converged until the late 1970s. We also showed that the utility estimates are highly correlated with the per capita real income. We also applied the model to interregional migration data in the United States and Canada and confirmed the model's validity.     

Regional Fertility Differentials and the Effect of Migration: An Analysis of U.S. State-level Data

This paper explores, theoretically and empirically, the influence of interregional migration on regional fertility differentials. Specifically, it tests the hypothesis that regions that are closely linked through migration have, all else held constant, a lower differential in fertility than regions that are relatively isolated from one another. A model linking the fertility differential between two states to migration as well as a number of socioeconomic variables is articulated. The model is tested by means of a randomization procedure using U.S. state-level data for 1980. Results support the hypothesis that an increasing volume of interregional migration tends to lower regional fertility differentials.     

Regional Inequality of Industrial Output in China, 1952 to 1990

This paper examines regional inequality of industrial output in China from 1952 to 1990. This study reveals that regional inequality was widespread when socialist China was established in 1949. It was reduced in the 1950s as a result of the efforts to develop the interior through the implementation of the First Five Year Plan (1953–57). After that, regional inequality persisted for one-and-a-half decades due mainly to the poor economic returns of the defence-oriented "Third Front" programme, decentralization, the reorientation of development policies, and the incidence of disruptive political events. Since the launch of economic reforms in 1978, interregional inequality among the eastern, central and western regions has gradually increased. However, interprovincial inequality decreased. The relative decline of the traditionally rich provinces (three municipalities and the northeastern industrial bases) has contributed to the decline of interprovincial inequality. Meanwhile, favourable state policy, local initiatives and foreign investment and trade have stimulated the growth of the coastal provinces of Jiangsu, Guangdong, Shandong, Zhejiang and Fujian, leading to more rapid coastal development and the increase of interregional inequality. The emerging new map of regional development is important to the understanding of regional inequality in post-Mao China.     

区域经济联系测度方法述评

区域研究是地理学的核心之一。区域经济联系测度是区域研究的焦点。在系统总结区域经济联系测度的理论与方法的基础上,本文认为区域经济联系测度一般依循尺度确定-区域划分-区域联系测度的路径;测度区域经济联系的主要指标有可达性、经济影响范围、经济联系强度、经济隶属度等。城市在区域网络中的作用、位置是区域经济联系测度的重点。通过区域经济联系强度的测度,有助于区域和城市发展定位,并指导规划。近年来城市化、信息化、全球化的快速发展对区域经济联系的测度提出了新的挑战,需要综合不同的方法或发展新方法来应对。     

A HEDONIC MODEL OF INTERREGIONAL WAGES,RENTS, AND AMENITY VALUES*

ABSTRACT This paper develops a general multimarket hedonic model appropriate for a national, interregional study of wages, housing prices, and location-specific amenities. The model encompasses the effects of interregional location, intraurban location, and city size. Typically, hedonic studies focus on a single market such as labor or housing and ignore interactions implicit in a more global compensation mechanism. Examination of the comparative statics of our model indicates that single-market differentials are partial prices and are unreliable measures of amenity values in an interregional context. Unbiased amenity values are estimated for a comprehensive set of amenities using data on housing prices for 34,414 households and wages for 46,004 workers from the 1980 Census of Population and Housing. Statistically significant differences in housing prices and wages are found due to amenities.     

IDENTIFYING OPTIMAL SECTOR GROUPINGS WITH THE HYPOTHETICAL EXTRACTION METHOD*

ABSTRACT We formulate the problems of finding a key sector and a key group of sectors in the economy by the hypothetical extraction method (HEM), and derive their analytic solutions that are termed industries’ factor worths. It is shown that the key group of k ≥ 2 sectors is, in general, different from the set of top k industries selected on the basis of the key sector problem, the issue which is totally ignored in the input–output (IO) linkage literature. Further, the related problems of finding a key region and a key group of regions in an interregional IO setting are discussed. We also examine how a change in an input coefficient affects the factor worth of an industry. The key group problem is applied to the Australian economy for factors of water use, CO₂ emissions, and generation of profits and wages.     

The economic impact of national competition policy on Australian regions

Over the past 7 years Australia has been undergoing substantial economic reform under a collaborative Federal and State government programme known as national competition policy. These reforms have increased the nation's productivity and international competitiveness, and are generally held responsible for Australia's increased growth rate in gross domestic product (GDP) per capita over the past decade. However, the reforms have been carried out against a background of increased interregional disparities, to which the reform programme may have partly contributed. In this study we examine a number of Australian studies that have used computable general equilibrium modelling to uncover the regional economic consequences of national competition policy.     

THE OPTIMAL CONVERGENCE OF REGIONAL INCOMES*

For many policy considerations it is assumed that the convergence of regional mean income will improve national equity by reducing overall inequality. The literature on decomposability of social welfare functions implies that this assumption is unwarranted. This paper develops a notion of optimal regional convergence. In general, the point of optimal convergence depends on the shapes of the regional income distributions, the inequality index used, and the rule for distributing interregional transfers. These concepts are illustrated with data on the regional income distributions of the Southern and Northern United States.     

THE FULL-DISTRIBUTION APPROACH TO AGGREGATE REPRESENTATION IN THE INPUT-OUTPUT MODELING FRAMEWORK*

ABSTRACT. This paper presents a probabilistic specification of coefficients in the input- output modeling framework. Although previous works on probabilistic input-output models attribute uncertainty to measurement and sampling errors, this specification derives from systematic variation directly attributable to industrial, institutional, and location factors. Experiments with national input-output data support the existence of such variation. Employing the specification not only yields a more flexible aggregate modeling framework capable of producing interval impact estimates, but also an alternative perspective on such issues as interregional differentiation and structural comparison, the identification of key industrial sectors, aggregation, and spatial variation in production.     

A NEW APPROACH TO MODELING THE IMPACT OF DISRUPTIVE EVENTS

This paper develops a new methodology to predict the interregional and interindustry impacts of disruptive events. We model the reactions of economic agents by minimizing the information gain between the pre‐ and postevent pattern of economic transactions. The resulting nonlinear program reproduces, as it should, the pre‐event market equilibrium. The methodology is tested further by means of a comparison of this base scenario with two regional production shock scenarios and two interregional trade shock scenarios. The outcomes show a plausible combination of partially compensating demand, supply, and spatial substitution effects, which justifies the further development, testing, and application of this new approach.     

The effects of internal migration on regional wage and unemployment disparities in Canada

"This paper examines the role of the migration mechanism in the context of a general interregional factor flow adjustment model. Using an estimation technique, which pools cross-section and time series data, the direct effects of migration flows and regional investment on the growth of regional wages and unemployment [in Canada] are examined. The results suggest that migration has a small, but significant impact on regional wages and unemployment rates."     

RECESSIONARY SHOCKS AND REGIONAL EMPLOYMENT: EVIDENCE ON THE RESILIENCE OF U.K. REGIONS*

ABSTRACT We analyze the resilience of U.K. regions to employment shocks. Two basic notions of resilience are distinguished. With engineering resilience, there is an underlying stable growth path to which a regional economy rebounds following a shock. With ecological resilience, shocks can permanently affect the growth path of the regional economy. Our data set consists of quarterly employment series for 12 U.K. regions (NUTS I) for the period 1971–2010. Using a seemingly unrelated regression (SUR) model specification, we test for the relevance of (engineering) resilience of U.K. regional employment to the four recessionary shocks in our sample. It turns out that U.K. regions do indeed differ in their resilience, but that these differences mainly concern the initial resistance to these shocks and not so much the recovery stage. The SUR model does not allow shocks to have permanent effects and it also does not take the possibility of time differentiated shock spillovers between the 12 regions into account. To this end, we also estimate a vector error‐correction model (VECM) specification where employment shocks can have permanent effects and where also interregional employment linkages are included. We find that employment shocks typically have permanent effects when it concerns the own‐region effects. Permanent effects can also be found for the impact on other regions but the interregional effects are typically only significant for nearby regions.     

长江三角洲技术扩散规律及其对策初探

技术扩散已经成为决定区域高新技术产业乃至区域经济可持续发展的重要因素,从时间尺度上看,区域技术扩散速度呈现"S"型分布。本文论述了我国经济技术较为发达的长江三角洲地区的技术扩散历程、态势、不同等级的技术扩散中心,在此基础上,提出了提高认识、建立区域技术扩散体系,发挥企业主体作用等促进技术扩散的对策建议。     

Regional Policy and the 'Regionalization' of University-Industry Links: A View from the English Regions

As several senior figures in UK Government have recently professed to want to promote the knowledge-driven economy across the nation, discussion of university-industry ties in less-favoured regions is particularly salient. This account documents how UK central government efforts to encourage greater university-industry links have increasingly taken on a regional dimension but then stresses that these efforts do not constitute a 'regional policy' (in the traditional sense of measures that seek to reduce interregional economic disparities). This activity is then set within the context of overall Government and European Union (EU) funding to universities which is also at odds with stated government aims of lessening regional economic disparities. The article goes on to highlight how mainstream regional policy, particularly that of the European Commission, has seen considerable support for university-industry activity in the regions but has faced an uncertain future due largely to the spectre of fund-draining EU expansion. The article concludes by asking what policies might be pursued for university-industry links to be increased in weaker regions. The underlying aim of the article is to contribute towards raising the profile of universities in debates about reducing interregional economic disparities (that must, in turn, be much higher on the public policy agenda).     

A LONG RUN ECONOMIC EFFECT ANALYSIS OF ALTERNATIVE TRANSPORTATION FACILITY PLANS—REGIONAL AND NATIONAL

Initially we explained the main part of our model which enabled us to estimate and compare the long run and global economic effects of alternative transportation facility plans. Usually the short run effects of this kind of regional economic impact have been analyzed by input-output models, and the long run effects by econometric models. However, in this model, the input-output model and the econometric model were combined so as to enable us to analyze the global and long run economic effects. The interregional trade pattern coefficients and input coefficients change endogenously in each year in this model. It has previously been assumed that the fixedness of interregional trade pattern coefficients and input coefficients are the weakest points in applying the interregional input-output model for long run studies. In our model, on the contrary, variation of these coefficients has central importance. We then showed the results which were obtained from applying this model to a comparison of the long run economic effects of alternative bridge construction plans over the Japan Inland Sea. The results obtained from this demonstrative calculation are reasonable. Thus, we think, this model has sufficient applicability to the comparison of economic effects of alternative plans for nationwide transportation facility improvement. However, the variations of production cost differentials between regions are given exogenously in this model. To make them endogenous, agglomeration economies should be considered more precisely. In that case, the applicability and the precision of this model could be improved.     

产业集聚:地理学与经济学主流观点的对比

20世纪80年代以来,国际学术界出现了两种以企业行为的分析为基础解释产业空间集聚的"新经济地理学"理论模型:地理学中的"新经济与工业地理学"和经济学中的"地理经济学"。本文从理论起源、产业集聚的成因、市场结构的性质、外部经济的类型、交易关系与根植性、产业集聚的机制等方面对二者进行了系统的比较分析。