FORECASTING STRUCTURAL-CHANGE WITH A REGIONAL ECONOMETRIC INPUT-OUTPUT MODEL

The sophistication of regional economic models has been demonstrated i n numerous ways, most recently in the form of linking several modeling systems or in the expansion in the number of equations that can be ma nipulated successfully to produce impact analyses or forecasts. In thi s paper, an alternative perspective is employed. What do regional macr o-level forecasts indicate about the process of structural change? A n ew methodology is illustrated that enables analysts to make forecasts of detailed structural change in the interindustry relations in an eco nomy. Using a regional econometric input-output model developed for th e Chicago metropolitan region, derived input-output tables are extract ed for the period 1975-2016. These tables are then analyzed to determi ne the forecasted direction of structural changes for the region. The innovation illustrated here is based on a model that exploits the gene ral equilibrium spirit of computable general equilibrium models throug h the adjustment of input coefficients to clear markets.