The economic situation differs from country to country, caused by difference in
population, geography, monetary system, political situation and a lot of other
factors. But even within one country there are always a number of regions that
differ from one another by their economic performance. This situation is
especially true for big countries like US. If the regions are too broadly
defined, the economic diversity would be lost. If the regions are too narrowly
defined, they are not likely to have any viability as economic entities, and
this circumstance will increase the problem of developing good regional economic
data pertinent to the individual regions.
Economic indicators like income,
employment and population may differ in the rural and urban areas of a single
region, but the growth of the region still depends on the economic performance
of the region as a whole, and especially the towns and cities. An input-output
model is very useful of measuring regional economic activity. Such a model
effectively determines the impact of one economic variable on another can be
used to analyze expected growth. The measure of regional economic indicators and
comparing them to national could produce a good estimate of economic performance
of a region. The regional economic model in case of the region within US could
be compared with the model of a small country. And national model could be seen
as an aggregation of many interrelated regional models.
This paper includes an
estimation of the regional economic model The model is an attempt to estimate
possible relationship within economic indicators. This paper also presents an
analysis of regional economic indicators and national economic indicators in
order to compare economic performance of the region and national economy as a
whole. This model use annual national and state level data to produce regional
estimates of income, employment, wages, population, labor force and the
unemployment rate as a economic indicators for Virginia state as a region.
Previous studies Regional scientists have long attempted to develop meaningful
definitions and measures of economic diversity and diversification, and to
establish functional relationships between diversity, diversification, and
economic performance. The Regional economic models where (were) created to
answer questions like "What is the relationship between a region’s changing
economic structure and performance. Recent econometric models of regions were
stressing macroeconomic relationship as a main idea of structuring of the model.
A Number of models have been constructed for states and even smaller areas in
order to find an effective forecasting tool linking the regional economic
forecasting to the national economic forecast. Regional models were constructed
as satellites to national models. Economic base theory views regional economic
growth as being driven by exogenous final demands, notably exports. Input-output
models are extensions of the economic base model, whereby intersectional
economic relationships are explicitly considered Because of the underlying
assumption that the regional economy is driven by exogenous final demands. The
idea of regional economic model that is (instead of ;that is; say
;used;) in this paper is based on two studies that present economic
models of regions in US. One study, reports on a regional economic modeling
approach used by East Kentucky Power Cooperative, Inc.
(EKPC), a rural electric
cooperative that serves 280,000 residential customers and 15,000 commercial
customers in east-central Kentucky. These models use quarterly, county-level
data to produce regional forecasts of income, employment, wages, population,
labor force and the unemployment rate (1). Another study describes an economic
model for state of Mississippi (2). Both studies indicated economic variables in
regional output, labor, and income and wages blocks and estimated regressions on
order(must be ;in order;) to fine (must be ;to find;)
direction of dependence among variables. Both studies provide graphical
interpretation of their models. Data Regional models often use data, which is
allocated to the region, state or national level on the basis of employment,
income or some other variable actually measured at the regional level.
may serve the needs of particular model specifications and produce forecasts of
variables. In this study, Virginia regional model uses a variety of national and
regional data. The variables are summarized in (Appendix A). All variables were
taken from University of Virginia Social Science Data Center (8). Gross domestic
product (GDP), the featured measure of U.S.
output, is the market value of the
goods and services produced by labor and property located in the United States.
Because the labor and property are located in the United States, the suppliers
(that is, the workers and, for property, the owners) may be either U.S.
residents or residents of the rest of the world. So GDP was taken .