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The Displacement and Multiplier Effects of Regional Selective Assistance: A Computable General Equilibrium Analysis


  • Gary Gillespie
  • Peter Mcgregor
  • J. Kim Swales
  • Ya Ping Yin


This paper uses a hybrid approach to simulate the effects of Regional Selective Assistance (RSA) for Scotland. This combines 'industrial survey' estimation of the direct impacts and computable general equilibrium (CGE) modelling of the system-wide effects. The results are compared to those derived using the method currently adopted in official evaluation studies of RSA and other regional regeneration policy instruments. The CGE approach captures capacity, labour market displacement and migration effects ignored in existing studies. Simulation identifies the conditions under which these effects are likely to be quantitatively important. A partir d'une facon hybride, cet article cherche a simuler pour l'Ecosse l'impact des primes regionales. Une estimation des effets directs a partir d'une enquete aupres de l'industrie se voit allier a la modelisation des effets generalises par une analyse d'equilibre general sur ordinateur. On compare les resultats a ceux qui proviennent des methodes employees actuellement dans les etudes officielles qui evaluent l'impact des primes regionales et d'autres incitations a finalite regionale. L'analyse d'equilibre general sur ordinateur saisit les effets de capacite, de deplacement du marche du travail et de migration dont les etudes anterieures ne tiennent pas compte. La simulation identifie les conditions selon lesquelles ces effets risquent d'etre quantitativement importants. Dieser Aufsatz benutzt eine Mischform des Ansatzes, um die Wirkung regionaler selektiver Hilfeleistung (Regional Selective Assistance= RSA) fur Schottland zu simulieren. Hierbei werden industrielle Ubersichtsschatzungen unmittelbare Auswirkungen mit der berechenbaren Erstellung des allgemeinen Equilibriums (Computable General Equilibrium= CGE) der Wirkungen kombiniert, die das gesamte System betreffen. Die Ergebnisse werden mit denen verglichen, die unter Benutzung der gegenwartig in offiziellen Bewertungsstudien der RSA und anderen Instrumenten der regionalen Regenerationspolitik benutzt werden. Der CGE Ansatz erfasst Kapazitat, Arbeitsmarkverschiebungen und Wanderungseffekte, die bereits vorhandene Studien vernachlassigt hatten. Simulation identifiziert die Bedingungen, unter denen diese Effekte von quantitativer Bedeutung sein konnten.

Suggested Citation

  • Gary Gillespie & Peter Mcgregor & J. Kim Swales & Ya Ping Yin, 2001. "The Displacement and Multiplier Effects of Regional Selective Assistance: A Computable General Equilibrium Analysis," Regional Studies, Taylor & Francis Journals, vol. 35(2), pages 125-139.
  • Handle: RePEc:taf:regstd:v:35:y:2001:i:2:p:125-139
    DOI: 10.1080/00343400120033115

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    References listed on IDEAS

    1. Layard, Richard & Nickell, Stephen & Jackman, Richard, 2005. "Unemployment: Macroeconomic Performance and the Labour Market," OUP Catalogue, Oxford University Press, number 9780199279173.
    2. Green, G.R., 1993. "An Incomplete Information Core of Dynamic Economy," UWO Department of Economics Working Papers 9314, University of Western Ontario, Department of Economics.
    3. Greenwood, Michael J, et al, 1991. "Migration, Regional Equilibrium, and the Estimation of Compensating Differentials," American Economic Review, American Economic Association, vol. 81(5), pages 1382-1390, December.
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    Cited by:

    1. 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, , vol. 45(4), pages 814-834, April.
    2. 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.
    3. James A. Giesecke & John R. Madden, 2013. "Evidence-based regional economic policy analysis: the role of CGE modelling," Cambridge Journal of Regions, Economy and Society, Cambridge Political Economy Society, vol. 6(2), pages 285-301.
    4. Sébastien Mary & Euan Phimister & Deborah Roberts & Fabien Santini, 2013. "Testing the sensitivity of CGE results: A Monte Carlo Filtering approach to an application to rural development policies in Aberdeenshire," JRC Working Papers JRC85290, Joint Research Centre (Seville site).
    5. Gilmartin, Michelle & Swales, Kim J. & Turner, Karen, 2008. "A comparison of results from MRIO and interregional computable general equilibrium (CGE) analyses of the impacts of a positive demand shock on the ‘CO2 trade balance’ between Scotland and the rest," SIRE Discussion Papers 2008-24, Scottish Institute for Research in Economics (SIRE).
    6. Giesecke, James A. & Madden, John R., 2013. "Regional Computable General Equilibrium Modeling," Handbook of Computable General Equilibrium Modeling, Elsevier.
    7. Swales, J. Kim, 2008. "The Relative Efficiency of Automatic and Discretionary Industrial Aid," SIRE Discussion Papers 2008-50, Scottish Institute for Research in Economics (SIRE).
    8. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    9. Byers, Steven & Cutler, Harvey & Davies, Stephen P., 2004. "Estimating Costs and Benefits of Economic Growth: A CGE-Based Study of Tax Incentives in a Rapidly Growing Region," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, vol. 34(4), pages 1-20.
    10. Psaltopoulos, Demetrios & Skuras, Dimitris & Thomson, Kenneth J., 2011. "Employment effects of private investment initiatives in rural areas of southern Europe: A regional SAM approach," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 12(2).
    11. Ochuodho, Thomas O. & Alavalapati, Janaki R.R., 2016. "Integrating natural capital into system of national accounts for policy analysis: An application of a computable general equilibrium model," Forest Policy and Economics, Elsevier, vol. 72(C), pages 99-105.
    12. Linda Ferguson & Peter Mcgregor & J. Kim Swales & Karen Turner & Ya Ping Yin, 2005. "Incorporating sustainability indicators into a computable general equilibrium model of the scottish economy," Economic Systems Research, Taylor & Francis Journals, vol. 17(2), pages 103-140.
    13. Gillespie, Gary & McGregor, Peter G. & Swales, J. Kim & Yin, Yan Ping, 1999. "A Computable General Equilibrium Approach to the Ex Post Evaluation of Regional Development Agency Policies," ERSA conference papers ersa99pa260, European Regional Science Association.


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