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Specification of a Borderplex Econometric Forecasting Model

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  • Thomas M Fullerton Jr

    (University of Texas at El Paso)

Abstract

Historically linked by geography, trade, and culture, border areas of the United States and Mexico are becoming even more closely integrated by the elimination of trade and investment barriers under the North American Free Trade Agreement. Greater economic integration raises the question of whether the traditional approach to regional econometric modeling is applicable to border metropolitan areas. This paper examines this issue with respect to the El Paso - Ciudad Juarez borderplex by specifying and estimating an econometric model and then simulating it under different currency conditions. Simulation output from the model is then compared and contrasted with extroplations from a Bayesian vector autoregression model. Results indicate that the traditional model provides a viable means for analyzing international border region business trends.

Suggested Citation

  • Thomas M Fullerton Jr, 2004. "Specification of a Borderplex Econometric Forecasting Model," Urban/Regional 0405006, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpur:0405006
    Note: Type of Document - doc; pages: 19
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    References listed on IDEAS

    as
    1. Thomas M Fullerton Jr, 2004. "Rational Reactions to Temporary Sales Tax Legislation," Public Economics 0408004, University Library of Munich, Germany.
    2. Runkle, David E, 1987. "Vector Autoregressions and Reality," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(4), pages 437-442, October.
    3. Victor Zarnowitz & Louis A. Lambros, 1983. "Consensus and Uncertainty in Economic Prediction," NBER Working Papers 1171, National Bureau of Economic Research, Inc.
    4. Runkle, David E, 1987. "Vector Autoregressions and Reality: Reply," Journal of Business & Economic Statistics, American Statistical Association, vol. 5(4), pages 454-454, October.
    5. David E. Runkle, 1987. "Vector autoregressions and reality," Staff Report 107, Federal Reserve Bank of Minneapolis.
    6. Granger, Clive W J, 1996. "Can We Improve the Perceived Quality of Economic Forecasts?," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 11(5), pages 455-473, Sept.-Oct.
    7. Carroll, Christopher D & Fuhrer, Jeffrey C & Wilcox, David W, 1994. "Does Consumer Sentiment Forecast Household Spending? If So, Why?," American Economic Review, American Economic Association, vol. 84(5), pages 1397-1408, December.
    8. Carol Taylor West & Thomas M. Fullerton Jr., 2004. "Assessing the Historical Accuracy of Regional Economic Forecasts," Urban/Regional 0404009, University Library of Munich, Germany.
    9. Fullerton, Jr., Thomas M. & Taylor West, Carol A., 1998. "Regional Econometric Housing Start Forecast Accuracy in Florida," The Review of Regional Studies, Southern Regional Science Association, vol. 28(3), pages 15-42, Winter.
    10. Hanson, Gordon H, 1996. "Localization Economies, Vertical Organization, and Trade," American Economic Review, American Economic Association, vol. 86(5), pages 1266-1278, December.
    11. Thomas M Fullerton Jr, 2004. "International Trade and Investment," Urban/Regional 0409010, EconWPA.
    12. Thomas M Fullerton Jr, 2004. "Cross Border Business Cycle (Impacts on Commercial Electricity Demand," Urban/Regional 0407010, EconWPA.
    13. Pflaumer, Peter, 1992. "Forecasting US population totals with the Box-Jenkins approach," International Journal of Forecasting, Elsevier, vol. 8(3), pages 329-338, November.
    14. Thomas M Fullerton Jr & Eiichi Araki, 2004. "New Directions in Latin American Macroeconometrics," Development and Comp Systems 0408002, University Library of Munich, Germany.
    15. Zarnowitz, Victor & Lambros, Louis A, 1987. "Consensus and Uncertainty in Economic Prediction," Journal of Political Economy, University of Chicago Press, vol. 95(3), pages 591-621, June.
    16. Lester Hunt & Martin Snell, 1997. "Comparative Properties of Local Econometric Models in the UK," Regional Studies, Taylor & Francis Journals, vol. 31(9), pages 891-901.
    17. Gonzalez, Pilar & Moral, Paz, 1995. "An analysis of the international tourism demand in Spain," International Journal of Forecasting, Elsevier, vol. 11(2), pages 233-251, June.
    18. J. P. Neary (ed.), 1995. "International Trade," Books, Edward Elgar Publishing, volume 0, number 575.
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    Citations

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    Cited by:

    1. Marcycruz de Leon & Thomas M Fullerton Jr & Brian W Kelly, 2009. "Tolls, Exchange Rates, And Borderplex International Bridge Traffic," Articles, International Journal of Transport Economics, vol. 36(2).
    2. Arnold Cote, K. Nicole & Smith, Wm. Doyle & Fullerton, Thomas M., Jr., 2010. "Municipal Non-Residential Real Property Valuation Forecast Accuracy," MPRA Paper 32116, University Library of Munich, Germany, revised 11 Feb 2011.
    3. Thomas Fullerton & David Schauer, 2001. "Short-run maquiladora employment dynamics," International Advances in Economic Research, Springer;International Atlantic Economic Society, vol. 7(4), pages 471-478, November.
    4. Fullerton, Thomas M., Jr. & Mukhopadhyay, Somnath, 2013. "Border Region Bridge and Air Transport Predictability," MPRA Paper 59583, University Library of Munich, Germany, revised 11 Jul 2013.
    5. Seung, Chang K. & Ahn, Sung K., 2010. "Forecasting Industry Employment for a Resource-Based Economy Using Bayesian Vector Autoregressive Models," The Review of Regional Studies, Southern Regional Science Association, vol. 40(2), pages 181-196.
    6. Thomas M. Fullerton Jr. & Angel L. Molina Jr & Adam G. Walke, 2013. "Tolls, exchange rates, and northbound international bridge traffic from Mexico," Regional Science Policy & Practice, Wiley Blackwell, vol. 5(3), pages 305-321, August.
    7. Kincal, Gokce & Fullerton, Thomas M., Jr. & Holcomb, James H. & Barraza de Anda, Martha P., 2010. "Cross Border Business Cycle Impacts on the El Paso Housing Market," MPRA Paper 29095, University Library of Munich, Germany, revised 2010.
    8. Thomas M Fullerton Jr & Arturo Elias, 2004. "Short-Term Water Consumption Dynamics in El Paso, Texas," Others 0410005, University Library of Munich, Germany.
    9. Thomas Fullerton & Adam Walke, 2014. "Homicides, exchange rates, and northern border retail activity in Mexico," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 53(3), pages 631-647, November.
    10. Thomas M Fullerton Jr, 2004. "Empirical Evidence Regarding El Paso Property Tax Abatements: 1988-2001," Public Economics 0405007, University Library of Munich, Germany.
    11. Pedro Niño & Roberto Coronado & Thomas Fullerton & Adam Walke, 2015. "Cross-border homicide impacts on economic activity in El Paso," Empirical Economics, Springer, vol. 49(4), pages 1543-1559, December.
    12. Fullerton, T.M., 2007. "Empirical Evidence Regarding 9/11 Impacts on the Borderplex Economy," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 7(2), pages 51-64.
    13. Thomas M. Fullerton Jr. & Juan Alberto Luevano & Carol Taylor West, 2004. "Accuracy of Regional Single-Family Housing Start Forecasts," Urban/Regional 0404010, University Library of Munich, Germany.
    14. Timothy C. Ford & Brian Logan & Jennifer Logan, 2009. "NAFTA or Nada? Trade's Impact on U.S. Border Retailers," Growth and Change, Wiley Blackwell, vol. 40(2), pages 260-286.
    15. Fullerton, Thomas M., Jr. & Walke, Adam G. & Villavicencio, Diana, 2015. "An Econometric Approach for Modeling Population Change in Doña Ana County, New Mexico," MPRA Paper 71141, University Library of Munich, Germany, revised 28 Jan 2015.
    16. Thomas M Fullerton Jr & David A Schauer, 2004. "Regional Econometric Assessment of Aggregate Water Consumption Trends," Urban/Regional 0407006, EconWPA.
    17. Thomas M Fullerton Jr, 2005. "Borderplex Bridge and Air Econometric Forecast Accuracy," Urban/Regional 0501005, EconWPA.
    18. Thomas M. Fullerton Jr. & George Novela, 2010. "Metropolitan Maquiladora Econometric Forecast Accuracy," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 124-140, September.
    19. Fullerton, Thomas M., Jr. & Ceballos, Alejandro & Walke, Adam G., 2015. "Short-Term Forecasting Analysis for Municipal Water Demand," MPRA Paper 78259, University Library of Munich, Germany, revised 04 Aug 2015.
    20. Thomas M Fullerton Jr & Roberto Tinajero, 2004. "Cross Border Cargo Vehicle Flows," International Trade 0405006, University Library of Munich, Germany.

    More about this item

    Keywords

    Border economics; regional econometrics; currency devaluation;

    JEL classification:

    • R15 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Econometric and Input-Output Models; Other Methods

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