Commodity Balance and Interregional Trade: Make and Use Approaches to Interregional Modelling
Institutional, or sector-by-sector, input-output tables have traditionally been used in regional and interregional modelling. The paper examines the origins of this tradition and argues instead both theoretically and empirically for the integration of Make and Use sub models in interregional models involving interregional trade, outlining the manned in which these can be integrated. Further, it is argued that structural form rather than reduced form models represent a sounder theoretical base. Finally, a Danish interregional model, LINE, based upon a SAM framework, employing these principles, is outlined and questions of data validity in this type of model are discussed.
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