Regional policy spillovers: the national impact of demand-side policy in an interregional model of the UK economy

M. Gilmartin, D. Learmonth, J.K. Swales, P.G. McGregor, K. Turner

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Abstract

UK regional policy has been advocated as a means of reducing regional disparities and stimulating national growth. However, there is limited understanding of the interregional and national effects of such a policy. This paper uses an interregional computable general equilibrium model to identify the national impact of a policy-induced regional demand shock under alternative labour market closures. Our simulation results suggest that regional policy operating solely on the demand side has significant national impacts. Furthermore, the effects on the nontarget region are particularly sensitive to the treatment of the regional labour market.
Original languageEnglish
Pages (from-to)814 – 834
Number of pages21
JournalEnvironment and Planning A
Volume45
Issue number4
DOIs
Publication statusPublished - 2013

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Keywords

  • regional policy
  • computable general equilibrium model
  • labour market
  • income
  • regional CGE modelling
  • migration
  • regional development policy

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