MINFORD P., STONEY P., RILEY J. and WEBB B. (1994) An econometric model of Merseyside: validation and policy simulations, Reg. Studies 28, 563-576. The paper estimates an econometric model of Merseyside on annual data. The model is derived from a Heckscher-Ohlin framework for the traded sector, set beside a non-traded sector and facing a positively sloped supply curve of manual labour whose reservation wage is set by unemployment benefits. With all other factor prices being set exogenously to the region through elastic supply, the supply of manual labour (responding to traded sector wages set by world market conditions) determines the size of the region's output. The model's fit over the past is acceptable, though data is limited. Its simulation properties, contrasting with those of previous demand-driven models, imply high returns to policies that reduce local costs such as taxes, union mark-ups and transport charges. Sub-regionEconometric model Avoidable costs Policy applications MINFORD P., STONEY P., RILEY J. et WEBB B. (1994) Un modkle iconomttrique de Merseyside: des preuves et des simulations de politique, Reg. Studies 28,563-576. L'article Cvalue un modtle CconomCtrique de Merseyside h partir de donntes annuelles. Le modtle tient d'un cadre du type Heckscher-Ohlin relatif au secteur marchand, en comparaison d'un secteur non-marchand et confront6 ? i une courbe d'offre ascendante concernant le travail manuel dont le salaire de base est fix6 en fonction des allocations ch6rn-age. Etant donne que tous les autres prix des facteurs sont fixts de faSon exogkne par I'ilasticitk de I'offre, il s'ensuit que l'offre du travail manuel (en riponse aux salaires du secteur rnarchand fixts en fonction de la conjonture mondiale) dttermine l'importance de la production rigionale. L'ajustement du modtle sur les anntes s'avsre acceptable malgrt que la disponibiliti des donnies soit limitie. Ses vertus par rapport aux autres modtles pilotts par la demande laissent supposer d'importantes retombtes positives suite h la mise en Oeuvre des politiques visant la rtduction des coiits locaux comme les taxes, les coiits majorts par les syndicats et les frais de transport. Sous-rigionModtle CconomCtrique Cofits tvitables Travail manuel Travail intellectuel Portte politique Manual labour Non-manual labour MINFORD P., STONEY P., RILEY J. und WEBB B. (1994) Ein okonometrisches Modell Merseysides: Bestatigung und Simulation von Zielsetzungen, Reg. Studies 28, 563-576. Dieser Aufsatz berechnet ein okonometrisches Modell Merseysides auf der Grundlage von Jahresdaten. Das Modell wird von einer Heckscher-Olinschen Gliederung fur das Sektorgeschaft abgeleitet, einem nichtSektorgeschaft beigeordnet und zieht sich einer zur positiven Seite geneigten Angebotskurve korperlich Arbeitender gegeniiber, deren Mindestlohn durch die Hohe der Arbeitslosenunterstitzung bestimmt wird. Da alle andem Faktorenpreise auBerhalb der Region durch elastistische Angebote bestimmt werden, bestimmt das Angebot an Handarbeitern (als Reaktion auf Lohne des Sektorgesch...

Stochastic simulations are used on the Liverpool Model of the UK to assess the effect of UK euro entry on macroeconomic stability. Instability increases substantially, particularly for inflation and real interest rates. A key factor is the extent of the euro's instability against the dollar; by adopting a regional currency the UK imports this source of shocks, as well as losing its control of interest rates. The results are not highly sensitive to changes in assumptions about the degree of labour market flexibility, the use of fiscal policy, and increased convergence of monetary transmission.

We look for a theoretical justification of nominal wage contracts in household diversification of risk. In a calibrated general equilibrium model we find from stochastic simulation that if both productivity and monetary shocks are temporary then optimal wage contracts are overwhelmingly nominal. The model suggests that the persistence in monetary shocks not only raises wage protection but also reduces welfare in a world where productivity shocks are persistent, as both theory and our empirical results for the OCED suggest they are. This suggests that this central bank practice is due for review.

The advent of bar-code, retail scanner data provides an alternative data source for the compilation of consumer price indexes. This paper outlines the nature and merits of such data for this purpose. The data allows aggregation via superlative index number formulae at a very elementary level and provides superior coverage to conventional sources. However, it has been argued that aggregation bias may still arise if the unit values which feed into the superlative indexes are defined for product items, as opposed to product items for given outlets. We explore for six products the nature and extent of unit value bias by outlet type. For three products we found the level of aggregation did not matter. However, we also found it can matter and established the extent of its effects which were always the aggregation by model only, falling less than by model and outlet. This should help provide a basis for an understanding of the issues at stake in the use of scanner data for the compilation of consumer price indexes.