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This article surveys the ways that regional economic forecasting and policy analysis models have been used to provide information as an input for policy decision making in the public and private sectors. The major areas are as follows: forecasting and planning; economic development; transportation; energy and natural resources; taxation, budget, and welfare; United States policies; and environmental policies. The survey indicates that, while analysis and research may be required to prepare for a model simulation, the predicted economic effects of a policy can be very important information as an input for a wide range of policy decisions.

Investment in regions rather than at national level has not been addressed sufficiently according to some observers. This has been blamed on lack of data. A mathematical model has been constructed using information from Hawaii and Washington, looking at residential and non-residential investment. Further to this research a model prediciting regional trends and policy has been constructed.

The Economic-Demographic Forecasting and Simulation (EDFS) model, with five different specifications for labor supply conditions, is evaluated by generating forecasts for the 50 states and the District of Columbia for the period 1981-1988. The model was supplied by Regional Economic Models, Inc. Included in the model assumptions were perfect mobility of capital and land supply positively responsive to rate of return. Most accurate forecasts were provided by specification of an upward-slope (partially mobile) labor supply.

The differences in wage rates among states is the key cause of wage variation. However, changes in the types of industries may drive wage rate changes, and consequently be the best method for predicting changes in relative wage rates. Research conducted in the early 1960s by G.H. Borts and J.L. Stein on personal income from 1880 through 1950 demonstrated that income increased because of workers moving from agriculture to other sectors, but could not explain the magnitude of the changes.

In this paper we present a general new economic geography model with multiple industries and regions, full labor and capital mobility, land use in production and consumption, and a dynamic adjustment process in which consumers maximize utility and firms respond to nonzero profits. All industries use intermediate inputs as well as land, labor, and capital. Systems of cities form endogenously within this framework, including asymmetrical urban hierarchies and cities of different sizes and industry compositions. Each urban area has a bid-rent gradient and zones with land uses and densities as in the yon Thunen model. The equilibrium depends not only on initial conditions but also on speeds of adjustment. The model is a prototype for empirical implementation, as illustrated with a simulation of the effects of transportation cost reductions., In this paper we present a general new economic geography model with multiple industries and regions, full labor and capital mobility, land use in production and consumption, and a dynamic adjustment process in which consumers maximize utility and firms respond to nonzero profits. All industries use intermediate inputs as well as land, labor, and capital. Systems of cities form endogenously within this framework, including asymmetrical urban hierarchies and cities of different sizes and industry compositions. Each urban area has a bid-rent gradient and zones with land uses and densities as in the yon Thunen model. The equilibrium depends not only on initial conditions but also on speeds of adjustment. The model is a prototype for empirical implementation, as illustrated with a simulation of the effects of transportation cost reductions.

Published average annual earnings distributions for families fail to distinguish between a family with high earnings over some of the year but no earnings during the rest of the year, and a family with earnings at a low rate over the entire year. This shortcoming makes it impossible to aggregate published data for purposes of modeling earning flows or measuring the number of families with specific earnings at a single moment in time. A method for deriving working period family earnings rates from CPS micro data is presented here and applied to regional data from 1967 through 1977. [ABSTRACT FROM AUTHOR]

Examines the problem of modeling sub-county areas which are too small that county-level economic forecasts cannot be used for policy purposes. System of equations used as a satellite to a country model to forecast economic events at the town level; Estimates of regression coefficients; Application in the simulation of the impact of new manufacturing jobs in a town within a county.

Examines the economic effects of state policy initiatives using the Massachusetts Economic Policy Analysis (MEPA). Analysis of the endogenous sectors in the MEPA model; Importance of national exogenous inputs in a state policy analysis model to analyze the external environment in which the state economy functions; Alternative long-term economic effects on Massachusetts.

Treyz G. I. and Stevens B. H. (1985) The TFS regional modelling methodology, Reg. Studies 19, 547–562. The Treyz, Friedlaender, Stevens (TFS) regional (i.e., sub-national) modelling approach represents an alternative to constructing regional models using traditional econometric procedures (TEP). In the TFS approach, a model structure based on economic theory is successively calibrated by using information from many sources and parameter estimates at each step from studies that encompass all regions. The use of a maintained structure and of large data sets yields econometric response parameters that are valid for all regions. However, the specific calibration coefficients and the time series for the model of any particular region are based on data for that region only. This makes the behavioural characteristics of the model of one region differ substantially from those of another region but it does not change the basic theoretical structure of the model from region to region. In this article the structural equations used in TFS models are presented. Key structural parameters are identified and their estimates are found in studies across all industries and occupations in time series for forty-eight states. [ABSTRACT FROM PUBLISHER]

Presents designs of a multinational policy analysis model. Adoption design strategy to avoid statistically unreliable coefficient estimates; Features the multiregional economy; Explanation of the employment determination equations.

A technique for creating regional input-output models based on national input-output technological coefficients is developed and tested. The Regional Purchase Coefficient (RPC), i.e., the proportion of regional demand fulfilled from regional production, is based on substitution between extra-and intra-regional sources in response to relative delivered costs. An RPC estimating equation is fitted using state economic and interstate transportation data. RPCs for all sectors are estimated for use in constructing 500-sector non-survey models for Washington and West Virginia. The A matrices, inverse matrices, and multipliers for suitable aggregations of these models are compared with the corresponding components of recent survey-based models for the same two states. The comparisons indicate that the RPC technique can provide at low cost models that are acceptably accurate for use in regional impact analysis. [ABSTRACT FROM PUBLISHER]

Focuses on the use of computers in economic education. View that a student should be taught how to use a computer the way an economist would use it; Information on the use of the computer as an instrument that the operator uses and understands to perform in his analysis; Opinion on access to a computer that provides a great teaching opportunity if the student is taught how he can perform simulations on the computer with his own model or with a widely used economic model; Reaction of a conventional economic model to exogenous change, which may teach a student.