Regional Decision-making Tools

South Florida Economic Forecasting Partnership

October 15 & 16, 2003

REGIONAL ECONOMIC MODELS, INC.

Thank You!

Objectives

• Resources: models, support, consulting

• Range: what-if, database, integration

• Explore:– Economic development analysis– Transportation analysis– Land use analysis– Fiscal, funding, & taxation analysis

Competition & Advantage

• Competition is any area in the world with quality goods and services to sell, and access to markets and transportation.

• Advantage goes to relatively productive total resources, not to merely cheap labor.

• Competition and advantage are regional.

Regional Analysis Activities

• Economic modeling

• Economic database resource

• Project evaluation

• Policy evaluation

• Economic development effects

• Transportation, land use, & fiscal analysis

Integrated Economic Analysis

• Baseline & simulation forecasting process• Model structure allows NAICS forecasting

and enables enhanced decision-making tools• Integrated REMI model optimizes each tool:

– Input-Output– Equilibrium– Econometric panel data– Economic geography (gravity & agglomeration)

How Does REMI Do It?

Alternative Simulation Forecast

Control Forecast

REMI Model Structure (2002 - )WITH ECONOMIC GEOGRAPHY LINKAGES

Output

Market SharesLabor & Capital Demand

Population & Labor Supply

Wages, Costs & Prices

REMI Model Linkages (Excluding Economic Geography Linkages)

State and Local Government Spending

Investment

(1) Output(1) Output

Output

Exports

Consumption

Real Disposable Income

(4) Wages, Prices, and Production Costs(4) Wages, Prices, and Production Costs

Employment Opportunity

Housing Price

Wage Rate Composite Wage Rate Production Costs

Composite PricesReal Wage RateConsumer Price

Deflator

(3) Demographic(3) Demographic (2) Labor & Capital (2) Labor & Capital DemandDemand

Optimal Capital Stock

Employment

Labor/Output Ratio

(5) Market Shares(5) Market Shares

Domestic Market Share

International Market Share

Population

ParticipationRate

Migration

Labor Force

Economic Geography Linkages

Intermediate Input Productivity

Intermediate Inputs (1) Output Block

(4) Wages, Prices, and Production Costs

Composite Wage

Production Costs

Composite Prices

(3) Demographic and Labor Supply

(2) Labor & Capital Demand

Labor Access Index

Employment

Labor Productivity

(5) Market Shares

Domestic Market Share

International Market Share

EconomicMigrants

Output

Commodity Access Index

A Look at the REMI Model:FLORIDA PARTNERSHIP

• Relative production cost: inputs, labor, capital, fuel• Employment: durables, nondurables, nonmanufacturing;

services; demand sources; occupations• Gross regional product: demand sources; sectors• Trade shares & trade flows• Demographics & economic migrants

• Regional interests (history & forecast)?• Regional issues (simple simulation)?

Development & Planning Applications

• Economic development proposal evaluation

• Regional development & cluster potential

• Work force development planning

• Project eligibility & grant funding

• Grant compliance & effects reporting

• Transportation analysis & land use planning

Policy Analysis & Forecasting Applications

• Regional long-term forecasting• Calibrated with local data at desired detail• Discussion: current regional approaches--

– Regional economic development evaluations– Regional cluster potential evaluations– Regional work force development program– Regional taxation & spending evaluations– Fiscal & funding effectiveness evaluations

“Quo Vadis?”

Let’s look at economic geography examples

• Clusters, competition, & Florida maps

• Small-area land use & Houston-Galveston

• Integrated transportation analysis