TY - JOUR
T1 - Modelling a Regional Economic System: the Case of Lombardy
AU - Baussola, Maurizio Luigi
PY - 2007
Y1 - 2007
N2 - Modelling a regional economic system: the case of Lombardy, Regional Studies 41, 19–38. During recent
years the demand for quantitative economic investigation to be used for policy analysis has grown rapidly. In addition, the European
economic and monetary integration process has increased the economic impact of regional economies, thus calling for
analytical instruments aimed at supporting the decision-making process. A regional econometric model of Lombardy’s labour
market was set up in which both labour demand and supply are endogenously determined and, thus, unemployment is determined
by their interaction. Therefore, labour demand in both the industrial sector and in private services is modelled, while labour supply
is split into two components that define, respectively, the participation rate and self-employment. The model simulations evaluate
the response of the regional labour market, in comparison with the national one, to exogenous shocks depending on shocks in
either demand or supply. The intersectoral difference highlights the fact that industry, although declining in terms of employment,
still maintains a crucial role in generating employment multiplier effects, which in turn may reduce unemployment. This evidence
has important policy implications as it suggests that industrial policy may play a crucial role in stimulating labour demand and
supply, and through this route the whole regional growth process.
AB - Modelling a regional economic system: the case of Lombardy, Regional Studies 41, 19–38. During recent
years the demand for quantitative economic investigation to be used for policy analysis has grown rapidly. In addition, the European
economic and monetary integration process has increased the economic impact of regional economies, thus calling for
analytical instruments aimed at supporting the decision-making process. A regional econometric model of Lombardy’s labour
market was set up in which both labour demand and supply are endogenously determined and, thus, unemployment is determined
by their interaction. Therefore, labour demand in both the industrial sector and in private services is modelled, while labour supply
is split into two components that define, respectively, the participation rate and self-employment. The model simulations evaluate
the response of the regional labour market, in comparison with the national one, to exogenous shocks depending on shocks in
either demand or supply. The intersectoral difference highlights the fact that industry, although declining in terms of employment,
still maintains a crucial role in generating employment multiplier effects, which in turn may reduce unemployment. This evidence
has important policy implications as it suggests that industrial policy may play a crucial role in stimulating labour demand and
supply, and through this route the whole regional growth process.
KW - Labour demand
KW - Labour supply
KW - Macro econometric model
KW - Regional econometric model
KW - Simulation
KW - Labour demand
KW - Labour supply
KW - Macro econometric model
KW - Regional econometric model
KW - Simulation
UR - http://hdl.handle.net/10807/123680
U2 - 10.1080/00343400600929036
DO - 10.1080/00343400600929036
M3 - Article
SN - 0034-3404
VL - 2007
SP - 19
EP - 38
JO - Regional Studies
JF - Regional Studies
ER -