Interregional General Equilibrium Model Research Articles

On the numerical structure of local and nationwide government spending multipliers: what can we learn from the Greek crisis?

ABSTRACT It has been recognised that the fiscal multiplier is a function of structural features of the economy and policy reaction parameters. Moreover, the debate on the magnitude of the multiplier along the business cycle has also been the subject of disputed debates. On these grounds, we look at the Greek case by calibrating a NUTS-2 interregional general equilibrium model using data for distinct states of the Greek economy during the development of the recent crisis. Whether this matters for local and nationwide multipliers depends on qualitative differences in the numerical structure of the model. As governments have to decide how to conduct fiscal policy, our results on the Greek case provide insights to policymakers on the reach of their actions in a spatially integrated system.

Fiscal Policy and regional inequality in Brazil

Abstract This paper aims to estimate the long-term impacts of an austerity policy in the Brazilian regions. Our main contribution is to measure those effects using a dynamic interregional general equilibrium model, capturing the indirect impacts in sectors and regions, in addition to the direct effects of the expenditure cuts. The main results show that the fiscal adjustment would attenuate growth in most of the Brazilian states by 2037. Municipalities located in the poorest regions would be relatively more affected. Furthermore, the adjustment would have a negative impact on regional inequalities in all scenarios, both at the state and municipal levels.

The Impacts of Climate Change on Agricultural Production, Land Use and Economy of the Legal Amazon Region Between 2030 and 2049

Abstract Global warming and climate impact on agricultural output, land use and food production. This paper seeks to verify the economic impacts of climate change in the Legal Amazon region, especially on agricultural production, land use, GDP and job creation. We employ the Computable General Equilibrium (CGE) model, REGIA - Inter-regional General Equilibrium Model for the Brazilian Legal Amazon, to assess changes in agricultural production and land use in the region due to climate change scenarios proposed by the IPCC (Intergovernmental Panel on Climate Change). The results indicate a drop in economic indicators in the Legal Amazon leading to a loss in real GDP in the order of 1.18% in 2049 due to decrease in production and employment in the agricultural sector. Deforestation will increase due to the gradual replacement of pasture areas by crop fields. Such changes are not homogeneous in the space, affecting more the states of Mato Grosso, Tocantins and Para, whose economy are dependent upon agriculture.

Gripe aviária no Brasil: uma análise econômica de equilíbrio geral

O vírus da influenza aviária H5N1 tem se disseminado rapidamente por diversos países e continentes nos últimos anos, podendo também chegar ao Brasil. A ausência e a necessidade de estimativas dos efeitos econômicos que surtos da doença podem provocar sobre o setor avícola brasileiro motivaram a presente pesquisa. Foram simulados três cenários utilizando-se de um modelo aplicado de equilíbrio geral inter-regional, denominado TERM-BR. Os resultados sinalizam impactos negativos de maior dimensão sobre o segmento avícola na região Sul, refletindo em dados ruins no conjunto da economia local. Já regiões produtoras de bens substitutos, ao terem a demanda aumentada nesse contexto, acabam por apresentar crescimento de renda, como é o caso do Centro-Oeste. Destaca-se a importância das reações do consumidor doméstico sobre o comportamento da produção avícola.

Regional Economic Impacts of Tourism: The Case of Denmark

Zhang J., Madsen B. and Jensen-Butler C. (2007) Regional economic impacts of tourism: the case of Denmark, Regional Studies 41, 839–853. The Danish interregional general equilibrium model LINE is presented together with its tourism submodel. The model is used to analyse the importance of tourism in regional economies and to decompose regional tourism multipliers. The difference between direct and derived effects is examined; and by using the model, the factors that determine the size of the direct effects and derived effects are identified. The analysis is applied to Danish regions which are divided into urban and rural regions. In general, the results show that tourism multipliers are larger in urban than in rural areas. Factors such as interregional trade, commuting and shopping leakage have to be taken into consideration when evaluating the derived effects. When the leakage is large, the tourism multiplier tends to be small. The paper also draws attention to the difference between absolute and relative impacts of tourism on the regional economy. Zhang J., Madsen B. et Jensen-Butler C. (2007) Les retombées régionales du tourisme: étude de cas du Danemark, Regional Studies 41, 839–853. On présente le modèle interrégional danois d'équilibre général appelé LINE conjointement avec le modèle secondaire sur le tourisme. On se sert du modèle afin d'analyser l'importance du tourisme dans les économies régionales et pour décomposer les multiplicateurs régionaux du tourisme. On examine la différence entre les retombées directes et indirectes et, à partir du modèle, on identifie les facteurs qui déterminent l'importance des retombées directes et indirectes. On applique l'analyse aux régions danoises, divisées en zones urbaines et rurales. En règle générale, les résultats laissent voir que les multiplicateurs du tourisme s'avèrent plus importants dans les zones urbaines qu'ils ne le sont dans les zones rurales. Pour évaluer les retombées indirectes, il faut tenir compte d'autres facteurs, tels les échanges interrégionaux, les migrations quotidiennes et la fuite des dépenses des ménages. Quand la fuite s'avère importante, le multiplicateur du tourisme a tendance à être négligeable. L'article cherche aussi à attirer l'attention sur la différence entre les retombées absolues et relatives du tourisme sur l'économie régionale. Retombées économiques du tourisme Multiplicateurs du tourisme Modélisation macroéconomique interrégionale Régions danoises Zhang J., Madsen B. und Jensen-Butler C. (2007) Die regionalen wirtschaftlichen Auswirkungen des Fremdenverkehrs: der Fall Dänemark, Regional Studies 41, 839–853. Vorgestellt wird das dänische interregionale allgemeine Gleichgewichtsmodell LINE sowie dessen Fremdenverkehrs-Untermodell. Anhand dieses Modells wird die Bedeutung des Fremdenverkehrs für regionale Wirtschaften analysiert, und es werden die Multiplikatoren für den regionalen Fremdenverkehr aufgeschlüsselt. Der Unterschied zwischen direkten und abgeleiteten Auswirkungen wird untersucht, und es werden mit Hilfe des Modells die Faktoren identifiziert, die die Größe der direkten und abgeleiteten Auswirkungen bestimmen. Die Analyse wird auf dänische Regionen angewandt, die in städtische und ländliche Regionen gegliedert werden. Im Allgemeinen zeigen die Ergebnisse, dass die Multiplikatoren des Fremdenverkehrs in städtischen Gebieten größer sind als in ländlichen. Bei der Bewertung der abgeleiteten Auswirkungen müssen Faktoren wie der Kriechverlust durch interregionalen Handel, Pendlerverkehr und Einkäufe berücksichtigt werden. Bei einem großen Kriechverlust fällt der Multiplikator des Fremdenverkehrs in der Regel klein aus. Außerdem wird im Beitrag auf den Unterschied zwischen den absoluten und den relativen Auswirkungen des Fremdenverkehrs auf die Regionalwirtschaft hingewiesen. Wirtschaftliche Auswirkungen des Fremdenverkehrs Multiplikatoren des Fremdenverkehrs Interregionale makroökonomische Modelle Dänische Regionen Zhang J., Madsen B. y Jensen-Butler C. (2007) Repercusiones de la economía regional en el turismo: El caso de Dinamarca, Regional Studies 41, 839–853. Aquí presentamos el modelo danés LINE de equilibrio general interregional además de su submodelo de turismo. Este modelo se utiliza para analizar la importancia del turismo en economías regionales y descomponer los multiplicadores del turismo regional. Examinamos las diferencias entre los efectos directos y derivados y con ayuda de este modelo identificamos los factores que determinan el tamaño de los efectos directos y derivados. El análisis se aplica a las regiones danesas que están divididas en regiones urbanas y rurales. En general, los resultados indican que los multiplicadores del turismo son mayores en zonas urbanas que en zonas rurales. Los factores de fuga, tales como el comercio interregional, los desplazamientos al trabajo y las compras, deben tenerse en cuenta a la hora de evaluar los efectos derivados. Cuando la fuga es superior, el multiplicador del turismo suele ser menor. En este artículo también resaltamos la diferencia entre los impactos absolutos y relativos del turismo en la economía regional. Impactos económicos del turismo Multiplicadores del turismo Modelo macroeconómico interregional Regiones danesas

Economic Effects of Regional Tax Incentives: A General Equilibrium Approach

SUMMARY Regional governments often adopt tax incentive programs to attract private investments to their jurisdictions. This behavior is no different in Brazil, where such incentive policies have been growing in the last few years due to a combination of factors. This paper uses a general equilibrium approach to evaluate the effects of a regional tax incentive program for attracting investments. The analysis focuses mainly on the financing of new private investments through tax revenue relief and public investment expenditures by regional and federal governments. The interregional general equilibrium model used to run the simulations captures the effects of regional interdependence and of vertical relationships between the governments. The results show that the effects on the employment and household welfare of consumers have been positive for the region implementing such an incentive policy, namely the State of Rio Grande do Sul. However, the effect on real GDP may not follow the same course, which could occur mainly because of the specialized pattern of production in the State. RESUMEN. Los gobiernos regionales adoptan programas de incentivo fiscal con el propósito de atraer inversiones a sus jurisdicciones. Este comportamiento no cambia en Brasil, donde dichas políticas de incentivo han crecido en los últimos años debido a un conjunto de factores. Este estudio se basa en el enfoque del equilibrio general, para evaluar los efectos de un programa de incentivo fiscal implementado para atraer inversiones. El modelo del equilibrio general interregional usado para realizar simulacros capta los efectos de la interdependencia regional, y de una relación vertical entre los gobiernos. Los resultados muestran que los efectos sobre el empleo y el bienestar doméstico de los consumidores son positivos para la región que implementa este tipo de política de incentivos como ocurre, por ejemplo en el estado de Río Grande do Sul. Sin embargo, el efecto sobre el PIB no sigue el mismo camino, lo que podría ser resultado, principalmente, del patrón de producción especializado del Estado. RESUMO. Os governos regionais adotam com freqüência programas de incentivo fiscal a fim de atrair investimentos privados para suas jurisdições. Este comportamento não é diferente no Brasil, onde tais políticas de incentivo têm crescido nos últimos anos devido a uma combinação de fatores. Este estudo usa uma abordagem do equilíbrio geral para avaliar os efeitos de um programa regional de incentivos fiscais para atrair investimentos. A análise enfoca principalmente o financiamento de investimentos privados novos através da redução da arrecadação fiscal e do investimento público pelos governos regionais e federal. O modelo do equilíbrio geral inter-regional usado nas simulações capta os efeitos da interdependência regional e de relacionamentos verticais entre os governos. Os resultados mostram que os efeitos sobre o emprego e o bem-estar doméstico dos consumidores são positivos para a região que implementa tal política de incentivo, a saber, o estado do Rio Grande do Sul. Entretanto, o efeito sobre o PIB real pode não seguir o mesmo caminho, e isto ocorreria sobretudo devido ao padrão de produção especializado no estado.

Environmental and Regional Impacts in Growth Scenarios for the Brazilian Economy

This study simulates environmental effects with the inter-regional general equilibrium model Mibra assuming economic growth rates in a pessimist scenario of 2.3% a.a. and an optimist scenario of 4.4% a.a., both for the period 2002-2012. Using pollution intensity coefficients associated to production activities, environmental effects were estimated for the whole country as well as for the regions North, Central, Northeast, Southeast and South. Results indicate that reducing concentration growth in the axes Southeast-South may improve environmental efficiency of the whole economy with lower ratios of industrial pollution and water and energy use levels per unit of output produced.

Economic Growth X Environment: Forecasts for the Brazilian Economy and Its 5 Macro Regions, 2002 to 2012

Using the MIBRA model, an Applied Interregional General Equilibrium Model, constructed for the Brazilian economy and its five macro regions (North, Northeast, Central West, Southeast, an South), this papers tries to identify which would be the impact of the economic growth in the Brazilian economy an in its macro regions, from 2002 to 2012, on environmental variables, i.e., organic and inorganic materials, particulates, sulfurates, water, energy, CO2, and the Amazon rain forest. Concerning the economic growth rates, two scenarios are constructed, one pessimist and other optimistic, and the impact of both scenarios on the environmental variables are then measured. Some major environmental concerns are raised for each one of the Brazilian macro regions: a) for the North region, represented mainly by the Amazon rain forest, it is taken into the consideration the trade off between the area used by agricultural activities with the area used by the rain forest; b) for the Northeast region, the main concern is the restriction on water use; c) for the Central West region, it is taken into consideration the expansion of the agriculture frontier; d) for the Southeast and South regions, the more industrialized regions, pollutants are a problem.

An Interregional General Equilibrium Analysis of Energy Demand/Supply in China

Since China has the extremely wide land area, study of equilibriating the interregional energy demand/supply is a more practical subject than that of national total energy. demand/supply. However, the natural energy resources are located mainly in the undeveloped northwestern inland area, therefore, the energy demand/supply in the southeastern coastal area strongly depends on the long distance transportation. In the present study, an interregional general equilibrium model has been constructed for China's energy issues, and then the growth of energy demand/supply has been calibrated by region and by sector. Moreover restriction on the capacity of long distance transportation is examined calibrating the its effects on the interregional and intersectoral linkages.

The adjustment of interregional input-output coefficients under heterogeneous price sensitivity

In this paper, an interregional general equilibrium model is presented which combines a linear structure with factor substitution under heterogeneous price sensitivity among industries. The model is an extension of the MRVIO model proposed by Liew and Liew (1984a, b) and is compared with others in the field of interregional computable general equilibrium models. A simple numerical exercise is carried out to assess the impact of alternative hypotheses (about elasticities of substitution) on the model's performance.