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

Citation

Gilmartin M, Learmonth D, Swales JK, McGregor PG & Turner K (2013) Regional policy spillovers: the national impact of demand-side policy in an interregional model of the UK economy. Environment and Planning A, 45 (4), pp. 814-834. https://doi.org/10.1068/a44355

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.

Keywords
regional CGE modelling; migration; regional development policy; Regional economics ; Regional growth ; Labor economics

Journal
Environment and Planning A: Volume 45, Issue 4