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Regional policy spillovers: the national impact of demand-side policy in an interregional model of the UK economy

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  • Michelle Gilmartin
  • David Learmouth
  • J Kim Swales
  • Peter McGregor
  • Karen Turner

Abstract

UK regional policy has been advocated as a means of reducing regional disparities and stimulating national growth. However, there is limited understanding of the interregional and national effects of such a policy. This paper uses an interregional computable general equilibrium model to identify the national impact of a policy-induced regional demand shock under alternative labour market closures. Our simulation results suggest that regional policy operating solely on the demand side has significant national impacts. Furthermore, the effects on the nontarget region are particularly sensitive to the treatment of the regional labour market. Keywords: regional CGE modelling, migration, regional development policy

Suggested Citation

  • Michelle Gilmartin & David Learmouth & J Kim Swales & Peter McGregor & Karen Turner, 2013. "Regional policy spillovers: the national impact of demand-side policy in an interregional model of the UK economy," Environment and Planning A, Pion Ltd, London, vol. 45(4), pages 814-834, April.
  • Handle: RePEc:pio:envira:v:45:y:2013:i:4:p:814-834
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    More about this item

    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
    • R58 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Regional Government Analysis - - - Regional Development Planning and Policy

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