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Modelling a Regional Economic System: The Case of Lombardy

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  • Maurizio Baussola

Abstract

Baussola M. (2007) Modelling a regional economic system: the case of Lombardy, Regional Studies 41, 19-38. During recent years the demand for quantitative economic investigation to be used for policy analysis has grown rapidly. In addition, the European economic and monetary integration process has increased the economic impact of regional economies, thus calling for analytical instruments aimed at supporting the decision-making process. A regional econometric model of Lombardy's labour market was set up in which both labour demand and supply are endogenously determined and, thus, unemployment is determined by their interaction. Therefore, labour demand in both the industrial sector and in private services is modelled, while labour supply is split into two components that define, respectively, the participation rate and self-employment. The model simulations evaluate the response of the regional labour market, in comparison with the national one, to exogenous shocks depending on shocks in either demand or supply. The intersectoral difference highlights the fact that industry, although declining in terms of employment, still maintains a crucial role in generating employment multiplier effects, which in turn may reduce unemployment. This evidence has important policy implications as it suggests that industrial policy may play a crucial role in stimulating labour demand and supply, and through this route the whole regional growth process. Baussola M. (2007) La modelisation d'un systeme economique regional: etude de cas de la Lombardie, Regional Studies 41, 19-38. On cherche a construire un modele econometrique regional du marche du travail de la Lombardie au sein duquel la demande et l'offre de main-d'oeuvre sont determinees de facon endogene. Les simulations evaluent la reponse du marche du travail aux chocs exogenes sur le plan regional, plutot que du point de vue national, par rapport a la demande ou a l'offre. La difference intersectorielle souligne que l'industrie joue toujours un role cle dans la production des effets multiplicateurs sur l'emploi qui, a leur tour, pourraient reduire le chomage. Les preuves ont des implications pour la politique, parce que cela laisse supposer que la politique industrielle pourrait jouer un role capital dans la stimulation du processus de croissance regionale sous tous ses aspects. Demande de main-d'oeuvre Offre de main-d'oeuvre Modeles econometriques regionaux Simulation Baussola M. (2007) Modellierung eines regionalen Wirtschaftssystems: der Fall der Lombardei, Regional Studies 41, 19-38. Wir errichten ein okonometrisches Regionalmodell des Arbeitsmarkts in der Lombardei, in dem sowohl die Nachfrage als auch das Angebot an Arbeitskraften endogen festgelegt werden. Durch die Modellsimulationen wird die Reaktion des regionalen Arbeitsmarkts auf exogene Storungen von Angebot oder Nachfrage untersucht und mit dem landesweiten Markt verglichen. Der Unterschied innerhalb des Sektors verdeutlicht die Tatsache, dass die Industrie auf dem Arbeitsmarkt weiterhin eine zentrale Rolle bei der Erzeugung multiplikatorischer Effekte spielt, welche wiederum zum Abbau der Arbeitslosigkeit beitragen konnen. Dieser Nachweis hat wichtige Auswirkungen auf die Politik, denn er legt den Schluss nahe, dass die Industriepolitik eine zentrale Rolle zur Forderung des Wachstums in der gesamten Region spielen kann. Nachfrage nach Arbeitskraften Angebot an Arbeitskraften Okonometrische Regionalmodelle Simulation Baussola M. (2007) Modelando un sistema de economia regional: el caso de Lombardia, Regional Studies 41, 19-38. Hemos creado un modelo econometrico regional sobre el mercado laboral de Lombardia donde la oferta y la demanda en el mercado laboral se determinan segun un modelo endogeno. En las simulaciones del modelo se evalua la respuesta del mercado de trabajo regional a choques exogenos en funcion de cada choque en la oferta o la demanda, comparandolo con el mercado nacional. La diferencia intersectorial destaca el hecho de que la industria sigue manteniendo un papel crucial para generar con efectos multiplicadores de empleo que, a su vez, pueden reducir el desempleo. Esta evidencia tiene importantes implicaciones politicas dado que sugiere que la politica industrial podria desempenar una funcion determinante en el estimulo del proceso de crecimiento regional en su conjunto. Demanda laboral Oferta laboral Modelos econometricos regionales Simulacion

Suggested Citation

  • Maurizio Baussola, 2007. "Modelling a Regional Economic System: The Case of Lombardy," Regional Studies, Taylor & Francis Journals, vol. 41(1), pages 19-38.
  • Handle: RePEc:taf:regstd:v:41:y:2007:i:1:p:19-38
    DOI: 10.1080/00343400600929036
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    References listed on IDEAS

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    1. Werner Roeger & Jan in 't Veld, 1997. "QUEST II. A Multi-Country Business Cycle and Growth Model," European Economy - Economic Papers 2008 - 2015 123, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Glickman, Norman J., 1977. "Econometric Analysis of Regional Systems," Elsevier Monographs, Elsevier, edition 1, number 9780122865503 edited by Mills, Edwin S..
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    Cited by:

    1. Andy Pike, 2007. "Editorial: Whither Regional Studies?," Regional Studies, Taylor & Francis Journals, vol. 41(9), pages 1143-1148.
    2. Simon FAUSER & Maurizio BAUSSOLA & J├╝rgen ROTH, "undated". "The Footprint of Innovation- Regional Labour Market Reactions to Macroeconomic Shocks," EcoMod2008 23800038, EcoMod.

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