Regional economic performance: An integrated approach

Decision makers who choose policy affecting future economic performance are often confronted with two types of information intended to aid the decision process. The first type of information, from input-output analysis, is usually presented in the form of industry multipliers aimed at measuring the economic impact of one sector relative to another and thus determining a ranking of industries. The second form of information is derived from time-series analysis and used to predict future economic performance. Here, forecasted growth rates of industrial output are compared, thus allowing another form of ranking. We propose that although this information is beneficial to the economic planner, it creates controversial and inconsistent rankings of industries. Instead, we present an integrated method of analysing economic performance which, through the use of a combined econometric input-output model, examines the interactions between industry multipliers and output growth rates over time.