This paper provides an overview of the Mid-Atlantic Region (MAR) economy an
d of models that can be used to analyze how climate change will affect it.
A regional input-output (I-O) table, downscaled from its national counterpa
rt, provides insight into the extent of the MAR's internal inter-dependence
, as well as its dependence on trade with the rest of the US and the rest o
f the world. The table indicates that climate-sensitive sectors play a rela
tively small direct role in the MAR, but multiplier and other types of gene
ral equilibrium effects could result in some small, but not insignificant,
impacts on other sectors and other regions. An application of the I-O model
to climate variability impacts on forest-related sectors illustrates this
point. Although I-O analysis is a useful tool for setting the stage for an
impact analysis, limitations of the methodology are identified. A general e
quilibrium approach is presented as an alternative that captures the best f
eatures of I-O, yet is able to incorporate non-linearities, input substitut
ion, behavioral considerations. and the workings of prices and markets.