Descriptive and Critical Review of Multiregional Econometric Models of the United States

Abstract

Author(s): Herman, Amy L. | Abstract: Many methodological tools exist for use by regional planners and policy analysts concerned with the implications of federal and regional policies for regional economies. Regional and multire­ gional econometric models represent a class of such tools not widely available for public use outside their institutional settings. The purpose of such models is to provide economic forecasting and policy simulations with analytic flexibility. Accordingly, the methods employed in developing econometric models differ sub­ stantially from those of other national or regional analysis methods because they are not consistently subjected to theoretic or account­ ing restrictions. For example, instead of relying solely on export­ base, input-output, or linear programming analysis, the emphasis in the development of econometric models is placed on their ability to model economic behavior empirically. While this may often involve the application of rigid theoretic constructs or accounting frameworks, the charm is that the constructs can be altered or com­ bined to suit the economy as perceived by the modeler, thereby increasing the model's potential value and usability.