Metro Regional Economic Model

0. Abstract Portland Metro presents its version of a regional economic model with embedded input-output coefficients as explanatory variables in the model's employment sector equations. The Metro model implements the integration strategy as described by Coomes et al (1991), Stover (1994), and Rey (1997). Coomes et al first described the I-SAMIS model technique for linking I-O and econometric models. Stover evaluates the efficacy of using Census benchmark I-O tables as technical coefficients for creating the inter-industry demand variables (IDV) in each industry employment equation. Rey clarifies the theoretical underpinnings of the IDV and the use of a national I-O matrix as a proxy for an unavailable regional matrix. The regional model implemented by Metro is based on this integrated approach as described by the literature. This paper describes Metro's regional model and presents the empirical estimates and some results from our study. It is shown that the Metro model contains reasonable parameter estimates and produces forecast estimates within tolerable limits. Key words: integrated regional econometric and input-output model; inter-industry demand variable; forecasting