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Supply Multipliers in Two Regional Economies


  • Miguel Vélez, Francisco Javier de
  • Llop Llop, Maria
  • Manresa, Antonio, 1954-


This paper focuses on the analysis of the economic impact that sectorial total factor productivity – or valued added - gains have on two regional Spanish economies (Catalonia and Extremadura). In particular it is studied the quantitative effect that each sector’s valued added injections has on household welfare (real disposable income), on the consumption price indices and factor relative prices, on real production (GDP) and on the government and foreign net income. To do that, we introduce the concept of supply multiplier. The analytical approach consists of a computable general equilibrium model, in which it is assumed perfect competition and cleared markets of goods and factors. All the parameters and exogenous variables of the model are calibrated by means of two social accounting matrices, one for each region under study. The results allow identifying those sectors with the greatest multipliers impact on consumer welfare as the key sectors in the regional economies. Keywords: efficiency gains, supply multipliers, key sectors, computable general equilibrium. JEL Classification: C68, R13.

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  • Miguel Vélez, Francisco Javier de & Llop Llop, Maria & Manresa, Antonio, 1954-, 2013. "Supply Multipliers in Two Regional Economies," Working Papers 2072/213636, Universitat Rovira i Virgili, Department of Economics.
  • Handle: RePEc:urv:wpaper:2072/213636

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    References listed on IDEAS

    1. 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.
    2. Dale Jorgenson & Mun Ho & Jon Samuels & Kevin Stiroh, 2007. "Industry Origins of the American Productivity Resurgence," Economic Systems Research, Taylor & Francis Journals, vol. 19(3), pages 229-252.
    3. Ferran Sancho, 2013. "Some conceptual difficulties regarding ‘net’ multipliers," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 537-552, October.
    4. Ana Salome Garcia Muniz & Antonio Morillas Raya & Carmen Ramos Carvajal, 2008. "Key Sectors: A New Proposal from Network Theory," Regional Studies, Taylor & Francis Journals, vol. 42(7), pages 1013-1030.
    5. Pyatt, F Graham & Round, Jeffery I, 1979. "Accounting and Fixed Price Multipliers in a Social Accounting Matrix Framework," Economic Journal, Royal Economic Society, vol. 89(356), pages 850-873, December.
    6. Mas Ivars Matilde & Robledo Domínguez Juan Carlos, 2010. "Productividad: una perspectiva internacional y sectorial," Books, Fundacion BBVA / BBVA Foundation, edition 0, number 2011100, December.
    7. Kenneth Hanson & Adam Rose, 1997. "Factor productivity and income inequality: a general equilibrium analysis," Applied Economics, Taylor & Francis Journals, vol. 29(8), pages 1061-1071.
    8. Erik Dietzenbacher, 2005. "More on multipliers," Journal of Regional Science, Wiley Blackwell, vol. 45(2), pages 421-426.
    9. Miguel, Francisco Javier de & Llop Llop, Maria & Manresa, Antonio, 1954-, 2011. "Simulating the Impact of Sectorial Productivity Gains on Two Regional Economies: Key Sectors from a Supply Side Perspective," Working Papers 2072/169681, Universitat Rovira i Virgili, Department of Economics.
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    Cited by:

    1. M. Alejandro Cardenete & M. Carmen Lima & Ferran Sancho, 2017. "A multiplier evaluation of primary factors supply–shocks," Working Papers 17.01, Universidad Pablo de Olavide, Department of Economics, Quantitative Methods and Economic History.

    More about this item


    Equilibri (Economia) -- Models matemàtics; Economia regional; 332 - Economia regional i territorial. Economia del sòl i de la vivenda;

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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