Systems Of Urban Places

A method of “structural chains” is proposed for the analysis of regional urban systems. Each chain is made up of a sequence of numerical elements representing the average population of places at various levels of urban development, from small mining or forestry settlements to large polyfunctional cities of regional or national rank. The absence of a particular category in a region is marked in the chain by a zero. The structural chains of local urban systems can be grouped into tables reflecting the structure of a regional urban system and its local variations. The key characteristics of urban systems reflected by these chains are: the number of elements or levels of development; the number of zeros and their position in the chain, reflecting the degree of development of the urban hierarchy; and the height of the regional tables (number of horizontal rows), representing the number of local urban structures. The method is tested and illustrated by the urban systems of the Dnieper-Donets and Black Sea regions of the Ukraine, the Upper Volga region, and the urban system of the Tatar ASSR.     

Simulating Sources of Uncertainty in Policy Forecasting with a Large-Scale Regional Econometric Model

Long-term forecasts may be helpful in establishing the general framework for a region's policy agenda, and a well-structured economic model offers an opportunity to identify major policy instruments affecting a region's long-term growth. Nevertheless, the uncertainty of long-term forecasts should serve to caution policymakers in interpreting and acting upon such information. To offer perspective on this aspect of forecasts, simulations of the Pittsburgh economy are performed to the year 1995 using a large-scale regional econometric model. The forecasts are based on alternative assumptions concerning the performance of the national economy and the objective conditions characterizing key industries in the region. In this way, the model is used to identify and quantify several major sources of uncertainty in long-term regional forecasts.     

THE ROLE OF DEFENSE CUTS IN THE CALIFORNIA RECESSION COMPUTABLE GENERAL EQUILIBRIUM MODELS AND INTERSTATE FACTOR MOBILITY*

ABSTRACT. This study develops a computable general equilibrium (CGE) model of California to examine the impact of recent defense cuts on the state's economy. The study demonstrates use of a CGE model to examine the sensitivity of regional economy models to assumptions about factor migration. Model variants include input-output and closed economy models as limiting cases. The results show that the California economy is sensitive to defense cuts. The multiplier relating the impact of defense cuts to state product ranges from one to almost five, depending on the degree of interstate factor mobility.     

MODERN MACROECONOMICS AND REGIONAL ECONOMIC MODELING*

ABSTRACT Despite a history of regional economic models being patterned after their national counterparts, modern macroeconomic methodology has yet to be fully embraced by regional scientists. In this paper, I argue that modern macroeconomic methodology has much to offer the field of regional economic modeling. For one, the empirical strategies used in implementing dynamic stochastic general equilibrium models provide insights into how regional computable general equilibrium models could be better parameterized and empirically verified. In addition, the structural macroeconomic approach more generally could be used to construct structural regional policy analysis models for use as alternatives to traditional regional models.     

Forecasting in a Small and Unstable Regional Economy Using Regime Shifting Models: The Case of Extremadura

We consider forecasting in a small and unstable regional economy subject to structural breaks. In this context, we work with two types of regime‐shifting databased models using cointegration theory. The objective of the present work is to analyze the out‐of‐sample forecasting performance of the two approaches used to construct a short‐term regional econometric model: stochastic and deterministic time varying parameters models. The forecasting experiments will be illustrated by specifying, and estimating an econometric model for Extremadura, a small and unstable region in southwestern Spain.     

A LONG-RUN INTERPRETATION OF REGIONAL INPUT-OUTPUT ANALYSIS*

ABSTRACT. Regional input-output (I-O) analysis is traditionally motivated by a short-run, extreme Keynesian vision of markets. In this paper we argue that an appropriately formulated, investment-endogenous, I-O system replicates the long-run equilibria of a wide range of regional models, many of which do not operate as I-O systems in the short run. In particular, we use a computable general equilibrium (CGE) framework to illustrate the impact of an aggregate demand disturbance on an I-O and standard neoclassical model. When run forward over a number of periods, the results from the capacity-constrained neoclassical model asymptotically approach the I-O outcome. We use sensitivity analysis to examine the speed of adjustment of the neo-classical system and investigate barriers to the attainment of the I-O result.     

Labor Productivity in Western Europe 1975–1985: An Intercountry, Interindustry Analysis

Using intercountry input-output tables and disaggregated employment data, we decompose labor productivity growth between 1975 and 1985 in six Western European countries into partial effects of six determinants including changing international trade and changing final demand. To this end, new multiplicative decomposition formulas are derived and implemented. In a similar way, we study labor productivity changes in vertically integrated industries. The effects of structural change on convergence are investigated also. We see this paper as an attempt to merge the convergence literature with earlier single-country productivity-change decompositions using input-output data.     

ON THE PLAUSIBILITY OF THE SUPPLY-DRIVEN INPUT-OUTPUT MODEL: EMPIRICAL EVIDENCE ON JOINT STABILITY*

ABSTRACT. This paper addresses the issue of the plausibility of the supply-driven input-output model from an empirical standpoint. We suggest that requiring production coefficients to remain perfectly fixed during an application of the supply-driven input-output model is unnecessarily restrictive given the extensive use of approximation methods in mathematics, economics and regional science. Simulations with the supply-driven version of an input-output table for a representative region are shown to result in changes in the corresponding production coefficients well within conventional tolerance levels.     

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.     

A DOUBLE-ENTRY METHOD FOR THE CONSTRUCTION OF BI-REGIONAL INPUT-OUTPUT TABLES*

ABSTRACT. In The Netherlands, a strong tradition in the construction and updating of (inter)regional input-output tables has been built up. The paper gives a brief overview of this Dutch experience and discusses the features of the by now more or less standardized double-entry bi-regional construction method (DEBRIOT). This method systematically adds sales and export coefficients to the usual construction procedures. Thus, it introduces consistency checks at the cell level of the input-output table. Moreover, it offers a non-survey technique to estimate a regional domestic sales table that is crucial to the double-entry character of the method.     

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.     

Leontief's “Environmental Repercussions and the Economic Structure…” Revisited: A General Equilibrium Formulation

A 1972 paper by Leontief on an input-output model with pollution removal activity as an explicit sector is reformulated as a computable general equilibrium model. The advantage of this reformulation is that substitution and rational behavior by producers and consumers can be modeled and prices are rendered endogenous. The two approaches are contrasted regarding the consequences of policy changes about taxation and technological improvements.     

HOUSEHOLD INCOME AND EXPENDITURE IN EXTENDED INPUT-OUTPUT MODELS: A COMPARATIVE THEORETICAL AND EMPIRICAL ANALYSIS*

ABSTRACT At the regional level in-migrant and indigenous workers are likely to have different income levels and consumption propensities. The effects that these differences have upon a local economy are explored within an extended input-output modeling framework. Two iterative input-output models, due to Miernyk et al. and Blackwell, are recast as systems of simultaneous equations and are shown to produce identical results. A detailed analysis is made of model structure and a method is outlined for the decomposition of income multipliers. Empirical versions of the two models, for Boulder and Cork, are reconstructed with data from the original studies and are used to make comparisons of the two local economies.     

Bayesian Estimation of Regional Production for CGE Modeling

Abstract Computable general equilibrium (CGE) models are often criticized for using restrictive functional forms and relying on external sources for parameter values in their calibration. CGE modelers argue that in many instances reliable econometric estimates of important model parameters are unavailable because they must be estimated using small numbers of time‐series observations. To address these criticisms, this paper uses a Bayesian approach to estimate the parameters of a translog production function in a regional computable general equilibrium model. Using priors from more reliable national estimates, and parameter restrictions required by neoclassical production theory, estimation is done by Markov chain Monte Carlo simulation. A stylized regional CGE model is then used to contrast policy responses of a Cobb‐Douglas specification with those from the estimated translog equation.     

PRODUCT-MIX AND TECHNOLOGICAL CHANGE WITHIN THE LEONTIEF INVERSE

ABSTRACT. Intertemporal differences in input-output coefficients can be attributed to technological change and to changes in the mix of products composing the aggregate sectors of input-output models. In this work, we develop the theoretical foundation necessary to separate these changes for both the structural and Leontief inverse matrices. Using this foundation, we examine the relative empirical importance of technological and product-mix change. The product-mix effect is then combined with RAS estimates of the technological effect to form updated estimates of the inverse. Results show that the accuracy of updated input-output coefficients can be improved in this manner.     

UPPER BOUNDS ON THE SIZES OF INTERREGIONAL FEEDBACKS IN MULTIREGIONAL INPUT-OUTPUT MODELS*

ABSTRACT. Upper bounds are presented for a measure of the overall percentage error caused in a multiregional input-output model when interregional feedback effects are ignored. This error figure is thus a measure of the magnitude of interregional linkages. The upper bounds are expressed as a function of the levels of self-sufficiency in the regions in the model and of the norms of the regional technical coefficients matrices. Experimental results are presented for a variety of examples that are thought to reflect real-world situations, and it is clear that in many cases the upper bound (and hence the error) is extremely small. The implication is that single-region input-output models may be adequate for a variety of questions.     

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.     

Development of Neural Network Based Hysteretic Models for Steel Beam-Column Connections Through Self-Learning Simulation

Beam-column connections are zones of highly complex actions and deformations interaction that often lead to failure under the effect of earthquake ground motion. Modeling of the beam-column connections is important both in understanding the behavior and in design. In this article, a framework for developing a neural network (NN) based steel beam-column connection model through structural testing is proposed. Neural network based inelastic hysteretic model for beam-column connections is combined with a new component based model under self-learning simulation framework. Self-learning simulation has the unique advantage in that it can use structural response to extract material models. Self-learning simulation is based on auto-progressive algorithm that employs the principles of equilibrium and compatibility, and the self-organizing nature of artificial neural network material models. The component based model is an assemblage of rigid body elements and spring elements which represent smeared constitutive behaviors of components; either nonlinear elastic or nonlinear inelastic behavior of components. The component based model is verified by a 3-D finite element analysis. The proposed methodology is illustrated through a self-learning simulation for a welded steel beam-column connection. In addition to presenting the first application of self-learning simulation to steel beam-column connections, a framework is outlined for applying the proposed methodology to other types of connections.     

Structural Change and Regional Disparities in Xinjiang,China

The paper by a noted American geographer and a specialist based in Germany examines and analyzes recent economic growth and structural change in the strategically significant and resource-rich (including oil and gas deposits) region of Xinjiang. The authors identify regional variation in the trajectory of economic development at the urban and county levels, employing conceptual approaches related to structural shifts in economic sectors and focusing on shifts in employment from agriculture to activities in the secondary and tertiary sectors. They also investigate the role of the tertiary sector using a labor transition model, examining its functioning in the context of the industrial sector's absorption of labor in the transitional economy of China. Calculations are based on the most recent official statistical data released by national and regional governments and available at present (mid-2006). Journal of Economic Literature, Classification Numbers: J21, J24, O18, R11. 9 figures, 4 tables, 45 references.     

A Biproportional Filter to Compare Technical and Allocation Coefficient Variations

In input-output analysis there are two alternate possibilities between Leontief's mechanism (fixed technical coefficients) and Ghosh's mechanism (fixed allocation coefficients). Testing the long-term consistency of these mechanisms entails comparing input-output matrices over time. This paper challenges the value of proportional filters (separate comparisons of column and row coefficients) and introduces the biproportional filter that allows simultaneous comparison of column and rows. An application is proposed using French input-output tables for 1980 and 1993. The stability of column coefficients cannot be taken for granted and, generally, for any sector, both row and column coefficients are found to change simultaneously.