An Application of the Stock Adjustment Model in Estimating Employment Multipliers for the South Central Louisiana Petroleum Economy 1964–84

Abstract

The South Central Louisiana Petroleum Economy received an economic rent from its petroleum resources during the energy crisis of the 1970s and early 80s. A differential export-base model incorporating a geometric lag was developed for estimating dynamic employment multipliers. This technique is especially applicable to regional economies in which exports are a major economic factor. Employment multipliers were estimated using ordinary least squares (OLS) regression. Results from the analysis indicate that agriculture, oil and gas mining, and manufacturing are highly significant employment generators. Both long-run and short-run employment multipliers were derived from the model. It is estimated that a five-dollar change in the real price of crude oil will result in a long-run employment change of 8,027 for the oil and gas mining industry. Based on estimates of the long-run multiplier, this will result in a total employment change of 28,014 for this economy.HE LOUISIANA ECONOMY HAS RELIED on industries that are

The 1987 Stock Market Crash and New York City Employment: An Intervention‐multiplier Analysis*

“…As commoniy estimated, the error correction model is not suited for this multivariate context and therefore the partial adjustment model is used in its place. Equation (2) is an estimable version of a dynamic partial adjustment model and has been used previously by Sasaki (1963) and Andrews and Tate (1988) to estimate local employment multipliers. The parameter iz measures the initial annual impact of a change in FIREX while &(1-&) measures the long-run multiplier effect.…”