Uncertainty in integrated regional models

Sergio J. Rey, Guy R. West, Mark V. Janikas

Research output: Contribution to journalArticle

17 Scopus citations

Abstract

This paper examines the nature of uncertainty in integrated econometric + input-output (ECIO) regional models. We focus on three sources of uncertainty: (a) econometric model parameter uncertainty; (b) econometric disturbance term uncertainty; and (c) input-output coefficient uncertainty. Through a series of Monte Carlo simulations we analyse the relative importance of each component as well as the question of how their interaction may propagate through the integrated model to affect the distributions of the endogenous variables. Our results suggest that there is no simple answer to the question of which source of uncertainty is most important in an integrated model. Instead, that answer is conditioned upon the focus of the analysis and whether the industry specific or macro level variables are of central concerns.

Original languageEnglish (US)
Pages (from-to)259-277
Number of pages19
JournalEconomic Systems Research
Volume16
Issue number3
DOIs
StatePublished - Sep 1 2004

Keywords

  • Econometric
  • Input-ouput
  • Integrated model
  • Uncertainty

ASJC Scopus subject areas

  • Economics and Econometrics

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