Abstract
AbstractBecause of more restrictive assumptions on regional input‐output (IO) models compared to computable general equilibrium (CGE) models, IO results are thought to be consistent with long‐run equilibrium but otherwise overestimated. We compare IO and CGE models' response to a shock to Washington crop exports under various labor market and capital closures. Contrary to conventional wisdom, we find that the positive secondary impacts are larger in the CGE models than in the IO model. Also contrary to conventional wisdom, we find that the closest match between direct effects is when the CGE model has short run, rather than long run restrictions.
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