Regional econometric models that reflect labor market relations

Dennis Glennon, Julia Lane, Stanley Johnson

Research output: Contribution to journalArticle

Abstract

Regional economic forecasting is often hampered by a lack of reliable data. This study attempts to improve the efficiency of forecasts by incorporating interindustry linkages in wage and employment determination into an econometric model. Prior information of historical linkages is utilized in the form of restricted least squares and applied to the Louisville metropolitan area. We provide a step toward the specification of reliable models that reflect the local institutional framework which is often ignored in neoclassical, labor market-based model specifications. Comparisons on forecast accuracy with other structural models found in the literature favor the use of local institutional factors, though univariate time series models still tend to outperform the econometric approach.

Original languageEnglish (US)
Pages (from-to)299-312
Number of pages14
JournalInternational Journal of Forecasting
Volume3
Issue number2
DOIs
StatePublished - 1987

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Keywords

  • Labor market
  • Model selection
  • Regional economic models
  • Restricted least squares

ASJC Scopus subject areas

  • Business and International Management

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