A Dynamic Integration Approach in Regional Input-Output and Econometric Models

Abstract

The methodology with which regional input-output information is incorporated into an econometric model specification has recently gained attention. Although the interdependency of a region's inter-temporal economic sectors has been emphasized, the dynamic properties of these inter-sectoral relationships have not been fully incorporated. This paper presents an attempt to introduce the dynamic properties of inter-sectoral relationships among the economic sectors of a region. The result is a unique Dynamic Integration Approach (DIA) model that not only accounts for structural change in a region's economy, but also is free from many of the inconsistencies and deficiencies associated with recent embedded-holistic models.