Integrating the fragmented regional and subregional socioeconomic forecasting and analysis: A spatial regional econometric input-output framework

This study presents an integrated socioeconomic forecasting and analysis framework: a spatial regional econometric input-output model and its application to the Chicago metropolitan area. The new framework is designed to overcome some limitations of existing models, particularly (1) limited consideration of population-employment interactions and (2) dominance of top-down approach to vertical integration of regional and subregional variables. It captures local and lower level conditions and their effects on macroeconomic variables by using a modified disequilibrium adjustment model that incorporates subregional dynamics into a regional econometric input-output model in a reciprocal, interactive manner, as opposed to a top-down allocation process. The framework also considers both region-wide and subregional level population-employment interactions more systematically. It is demonstrated that the present model can support socioeconomic forecasting and a broad range of analyses, including the examinations of the macroeconomic impacts of local actions.