Three Essays on Regional Economic Modelling

Essay 1: Constructing a Social Accounting Matrix for Sardinia. Recently, the Social Accounting Matrix (SAM) has been resurrected as a policy analysis tool and, in the last decade, attention has been paid to SAM multipliers, as well as to the use of the SAM as a benchmark for computable general equilibrium models. This paper construct a SAM for the regional economy of sardinia that can be used for policy evaluation and impact analysis. A mixture of approaches is used from simple compilation and decomposition metheds to procedures for matrix estimations and matrix balancing. Essay 2: R&D Investment and External Knowledge Spillovers: an investigation of the impact of R&D subsidy on a recipient region in a computable general equilibrium model. In this paper we present a computable general equilibrium model for the region of Sardinia (Italy) with the purpose of evaluating the capacity of R&D policies to affect the long run rate of growth. The model incorporates induced technical change (ITC) obtained through knowledge accumulation, and external knowledge spillowers. It runs out that the cost of R&D policies may change according to the wage setting prevailing in the region. Furthermore, the capacity of such a policy to generate knowledge spillowers from international and interregional trade is quite modest. Ideed, the capacity of the regional system to internalize the innovations embedded in the importde goods is partially offset by increase in internal efficiency that lowers the spillower intensity through a reduction in the share of imports. Essays 3: An applied regional intertemporal general equilibrium model: does the forward looking model fit the usual regional closures? We present a stylized regional intertemporal forward-looking model able to take into account regional economic features, an area that is not well developed in the literature. The main difference from standard applications is the role of savings and its implication for the balance of payments. Though maintaining dynamic forward-looking behaviour for agents, the rate of private saving will be exogenously determined, and so no neoclassical financial adjustment is needed. Also, we focus on the similarities and the differences between myopic and forward looking models, highlighting divergences between the main adjustment equations and the resulting simulation outcomes.