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Regional Financial And Monetary Policy Analysis Model

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  • Chase Econometric Associates for the Economic Development Division

Abstract

A multiregional econometric model is presented for evaluating the differences in impact of monetary and financial policy changes on economic development in metropolitan and nonmetropolitan regions in the United States. The model is demonstrated using the four principal U.S. Census regions, eacn of which is disaggregated into metropolitan and nonmetropolitan components. The model indicates that nonmetropolitan regions generally are less affected by overall changes in monetary policy than are metropolitan areas. However, significant differences are found among both metropolitan and nonmetropolitan reactions in different parts of the United States, depending on the economic structure of the region. The model also indicates that increases in credit to rural areas financed from metropolitan areas increases rural economic activity; however, the decrease in metropolitan activity more than offsets the rural gains, and the rural gains tend to dissipate over time. Special features of the model permit it to be easily changed to test alternative policies and assumptions regarding economic structure.

Suggested Citation

  • Chase Econometric Associates for the Economic Development Division, 1981. "Regional Financial And Monetary Policy Analysis Model," Staff Reports 276719, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerssr:276719
    DOI: 10.22004/ag.econ.276719
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    References listed on IDEAS

    as
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