Forward Looking and Myopic Regional Computable General Equilibrium Models. How Significant is the Distinction?

Patrizio Lecca, Peter McGregor, J. Kim Swales

Research output: Working paperDiscussion paper

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Abstract

We present a stylized intertemporal forward-looking model able that accommodates key regional economic features, an area where the literature is not well developed. The main difference, from the standard applications, is the role of saving and its implication for the balance of payments. Though maintaining dynamic forward-looking behaviour for agents, the rate of private saving is exogenously determined and so no neoclassical financial adjustment is needed. Also, we focus on the similarities and the differences between myopic and forwardlooking models, highlighting the divergences among the main adjustment equations and the resulting simulation outcomes.
Original languageEnglish
Place of PublicationGlasgow
PublisherUniversity of Strathclyde
Pages1-56
Number of pages57
Volume11
Publication statusPublished - 2011

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Keywords

  • myopic and forward-looking behaviour
  • computable general equilibrium models
  • regional adjustment

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