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Simulation properties of a regional interindustry econometric model

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Papers of the Regional Science Association

Conclusion

Unfortunately, we do not know how closely WPSM simulates the regional impact process, since we cannot observe the economy's “true” multipliers. Nor are we on sound empirical grounds for concluding that WPSM's simulation properties are necessarily superior to those of other state models, such as the static input-output formulation.

Nevertheless, considering WPSM's economic structure, which has been subjected to an array of empirical tests, the model is an appealing tool for impact analysis. In spite of its current shortcomings, WPSM's four-way accounting of the dynamic behavior of output, income, expenditures, and employment within an interindustry framework offers three attractive attibutes: an explicit, logical, yet flexible structure; a detailed and comprehensive coverage of economic variables; and internally consistent projections. Drawing upon a pool of time-series and cross-section data WPSM attempts to combine the best features of more traditional specifications of regional econometric and input-output models.

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Authors and Affiliations

  1. Washington State Department of Commerce and Economic Development, Washington, USA

    Richard S. Conway Jr.

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  1. Richard S. Conway Jr.
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Conway, R.S. Simulation properties of a regional interindustry econometric model. Papers of the Regional Science Association 43, 45–57 (1979). https://doi.org/10.1007/BF01935606

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