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Supply Multipliers in Two Regional Economies

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  • Miguel Vélez, Francisco Javier de
  • Llop Llop, Maria
  • Manresa, Antonio, 1954-

Abstract

This paper focuses on the analysis of the economic impact that sectorial total factor productivity – or valued added - gains have on two regional Spanish economies (Catalonia and Extremadura). In particular it is studied the quantitative effect that each sector’s valued added injections has on household welfare (real disposable income), on the consumption price indices and factor relative prices, on real production (GDP) and on the government and foreign net income. To do that, we introduce the concept of supply multiplier. The analytical approach consists of a computable general equilibrium model, in which it is assumed perfect competition and cleared markets of goods and factors. All the parameters and exogenous variables of the model are calibrated by means of two social accounting matrices, one for each region under study. The results allow identifying those sectors with the greatest multipliers impact on consumer welfare as the key sectors in the regional economies. Keywords: efficiency gains, supply multipliers, key sectors, computable general equilibrium. JEL Classification: C68, R13.

Suggested Citation

  • Miguel Vélez, Francisco Javier de & Llop Llop, Maria & Manresa, Antonio, 1954-, 2013. "Supply Multipliers in Two Regional Economies," Working Papers 2072/213636, Universitat Rovira i Virgili, Department of Economics.
    • Handle: RePEc:urv:wpaper:2072/213636
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    References listed on IDEAS

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    1. Manuel Alejandro Cardenete & Ferran Sancho, 2012. "The Role Of Supply Constraints In Multiplier Analysis," Economic Systems Research, Taylor & Francis Journals, vol. 24(1), pages 21-34, June.
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    6. Mas Ivars Matilde & Robledo Domínguez Juan Carlos, 2010. "Productividad: una perspectiva internacional y sectorial," Books, Fundacion BBVA / BBVA Foundation, edition 0, number 2011100, December.
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    10. Miguel, Francisco Javier de & Llop Llop, Maria & Manresa, Antonio, 1954-, 2011. "Simulating the Impact of Sectorial Productivity Gains on Two Regional Economies: Key Sectors from a Supply Side Perspective," Working Papers 2072/169681, Universitat Rovira i Virgili, Department of Economics.
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    More about this item

    Keywords

    Equilibri (Economia) -- Models matemàtics; Economia regional; 332 - Economia regional i territorial. Economia del sòl i de la vivenda;
    All these keywords.

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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