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Forward-looking and myopic regional Computable General Equilibrium models: How significant is the distinction?

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  • Lecca, Patrizio
  • McGregor, Peter G.
  • Swales, J. Kim

Abstract

We present a stylized intertemporal forward-looking model 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 amongst the main adjustment equations and the resulting simulation outcomes.

Suggested Citation

  • Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2013. "Forward-looking and myopic regional Computable General Equilibrium models: How significant is the distinction?," Economic Modelling, Elsevier, vol. 31(C), pages 160-176.
  • Handle: RePEc:eee:ecmode:v:31:y:2013:i:c:p:160-176 DOI: 10.1016/j.econmod.2012.11.010
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    Cited by:

    1. Tobias Emonts-Holley & Alastair Greig & Patrizio Lecca & Katerina Lisenkova & Peter G McGregor & J Kim Swales, 2017. "The impact of enhanced regional fiscal autonomy: towards a scandinavian movel for Scotland," Working Papers 1707, University of Strathclyde Business School, Department of Economics.
    2. Grant J. Allan, 2015. "The Regional Economic Impacts of Biofuels: A Review of Multisectoral Modelling Techniques and Evaluation of Applications," Regional Studies, Taylor & Francis Journals, pages 615-643.
    3. Elshennawy, Abeer & Robinson, Sherman & Willenbockel, Dirk, 2016. "Climate change and economic growth: An intertemporal general equilibrium analysis for Egypt," Economic Modelling, Elsevier, vol. 52(PB), pages 681-689.
    4. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim, 2010. "Balanced Budget Government Spending in a Small Open Regional Economy," SIRE Discussion Papers 2010-68, Scottish Institute for Research in Economics (SIRE).
    5. 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.
    6. Gioele Figus & Patrizio Lecca & Karen Turner & Peter McGregor, 2016. "Increased energy efficiency in Scottish households: trading-off economic benefits and energy rebound effects?," EcoMod2016 9454, EcoMod.
    7. Allan, Grant & Lecca, Patrizio & McGregor, Peter & Swales, Kim, 2014. "The economic and environmental impact of a carbon tax for Scotland: A computable general equilibrium analysis," Ecological Economics, Elsevier, vol. 100(C), pages 40-50.
    8. Lecca, Patrizio & McGregor, Peter G. & Swales, J. Kim & Turner, Karen, 2014. "The added value from a general equilibrium analysis of increased efficiency in household energy use," Ecological Economics, Elsevier, vol. 100(C), pages 51-62.
    9. repec:eee:touman:v:59:y:2017:i:c:p:325-337 is not listed on IDEAS
    10. Gioele Figus & J Kim Swales & Karen Turner, 2017. "Can a reduction in fuel use result from an endogenous technical progress in motor vehicles? A partial and general equilibrium analysis," Working Papers 1705, University of Strathclyde Business School, Department of Economics.
    11. repec:eee:enepol:v:108:y:2017:i:c:p:715-730 is not listed on IDEAS
    12. Gioele Figus & Patrizio Lecca & Peter McGregor & Karen Turner, 2017. "Energy efficiency as an instrument of regional development policy? Trading-off the benefits of an economic stimulus and energy rebound effects," Working Papers 1702, University of Strathclyde Business School, Department of Economics.
    13. Allan, G.J. & Lecca, P. & McGregor, P.G. & Swales, J.K., 2014. "The economic impacts of marine energy developments: A case study from Scotland," Marine Policy, Elsevier, vol. 43(C), pages 122-131.

    More about this item

    Keywords

    Myopic and forward-looking behaviour; Computable General Equilibrium models; Regional adjustment;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • R10 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General

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