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Forward Looking and Myopic Regional Computable General Equilibrium Models. How Significant is the Distinction?

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  • Patrizio Lecca

    ()
    (Department of Economics, Fraser of Allander Institute, The University of Strathclyde)

  • Peter McGregor

    ()
    (Department of Economics, The University of Strathclyde)

  • Kim Swales

    ()
    (Department of Economics, Fraser of Allander Institute, The University of Strathclyde)

Abstract

We present a stylized intertemporal forward-looking model able that accommodates key regional economic features, an area where the literature is not well developed. The main difference, from the standard applications, is the role of saving and its implication for the balance of payments. Though maintaining dynamic forward-looking behaviour for agents, the rate of private saving is exogenously determined and so no neoclassical financial adjustment is needed. Also, we focus on the similarities and the differences between myopic and forward-looking models, highlighting the divergences among the main adjustment equations and the resulting simulation outcomes.

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File URL: http://www.strath.ac.uk/media/departments/economics/researchdiscussionpapers/2011/11-33-Final.pdf
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Bibliographic Info

Paper provided by University of Strathclyde Business School, Department of Economics in its series Working Papers with number 1133.

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Length: 57 pages
Date of creation: Nov 2011
Date of revision:
Publication status: Published
Handle: RePEc:str:wpaper:1133

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Keywords: Myopic and Forward-looking Behaviour; Computable General Equilibrium Models; Regional Adjustment.;

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Cited by:
  1. Garau, Giorgio & Lecca, Patrizio & Mandras, Giovanni, 2013. "The impact of population ageing on energy use: Evidence from Italy," Economic Modelling, Elsevier, vol. 35(C), pages 970-980.

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