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Enhancing Our Understanding of a Regional Economy: The Complementarity of CGE and EIO Models

Author

Listed:
  • Andrew Crawley

    (School of Economics, University of Maine)

  • Geoffrey J.D. Hewings

    (Department of Economics, University of Illinois at Urbana-Champaigne)

Abstract

Economic impact models are powerful tools for the assessment of policy changes in regional economies. Computable General Equilibrium (CGE) models have grown in popularity, becoming the dominant choice of practitioners and academics in this field. This popularity has been at the expense of an older class of model, the Econometric Input Output (EIO). The present paper demonstrates how both models, using the same input data, may yield different outcomes. However, the paper suggests that EIO has been underutilized even though it provides a strong complementary tool accompany that enhance analyses using a CGE approach. This paper urges regional economists to rediscover the EIO model, especially two variants that are described in the paper, and bring them to the forefront of their research agenda.

Suggested Citation

  • Andrew Crawley & Geoffrey J.D. Hewings, 2020. "Enhancing Our Understanding of a Regional Economy: The Complementarity of CGE and EIO Models," Working Papers Working Paper 2020-02, Regional Research Institute, West Virginia University.
    • Handle: RePEc:rri:wpaper:2020wp02
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    File URL: https://researchrepository.wvu.edu/rri_pubs/218/
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    More about this item

    Keywords

    Econometric Input-Output Model; CGE;

    JEL classification:

    • B41 - Schools of Economic Thought and Methodology - - Economic Methodology - - - Economic Methodology
    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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