INTEGRATING ECONOMETRIC AND INPUT-OUTPUT MODELS IN A MULTIREGIONAL CONTEXT

This paper explores the extension of integrated econometric/input-outp ut models from a single to a multiregional context. A number of method ological issues associated with existing treatments of extraregional r elations in both traditional multiregional econometric models and the more recent single region integrated models are discussed. A series of new approaches are introduced that rely on the integration of econome tric and input-output methods to specify extraregional linkages. A com parison of these alternative modeling approaches is undertaken using e mployment series for 5 regions in Southern California. The forecasting accuracies are evaluated in a series of out-of-sample forecasting exp eriments. The findings suggest that the forecasting performance of the multiregional extensions of the integrated approach is competitive wi th the performance of single region implementations. The performance o f the alternative multiregional approaches is found to be relatively m ore sensitive to regionalization of the IO component and the level of industrial disaggregation than to the incorporation of distance in the specification of the multiregional linkages.