Economics 304

URBAN ECONOMICS
Fall 2020
 
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G. Economic Impac Analysis

1.  Economic sectors

  • Export (basic) - sells products to consumers outside the city
  • Local (nonbasic) - sells products to consumers within the city
  • Money brought in by export sector re-spent in local sector => multiplier effect

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2.  Input-output analysis

  • Based on the interdependencies or interactions between economic sectors or industries

Ex. - Input coefficients

    Producers    
Inputs Computer Firms Component Producers Local Merchants Households
Computers 0.00 0.30 0.06 0.05
Components 0.20 0.00 0.00 0.00
Local 0.00 0.00 0.00 0.69
Labor 0.50 0.60 0.80 0.00
Imports 0.30 0.10 0.14 0.26
Total 1.00 1.00 1.00 1.00

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2.  RIMS II multipliers

  • Estimates the impact from changes in final demand on one or more regional industries in terms of output, employment, and labor earnings

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a.  Forecasting output

  • Multiply export spending by ouput mulitpliers

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b.  Forecasting employment

  • Multiply export spending by employment multipiers

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c.  Forecasting earnings

  • Multiply export spending by earnings multipliers

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d.  Forecasting demographic and fiscal impacts

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