Forward looking versus myopic regional computable general equilibrium models : how significant is the distinction?

Lecca, Patrizio and McGregor, Peter and Swales, John (2009) Forward looking versus myopic regional computable general equilibrium models : how significant is the distinction? In: North American Regional Science Association, 2009-11-19 - 2009-11-21. (Unpublished)

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    Abstract

    We present a stylized intertemporal forward-looking model able that accommodates key regional economic features, an area where the literature is not well developed. The main difference, from the standard applications, is the role of saving and its implication for the balance of payments. Though maintaining dynamic forward-looking behaviour for agents, the rate of private saving is exogenously determined and so no neoclassical financial adjustment is needed. Also, we focus on the similarities and the differences between myopic and forward-looking models, highlighting the divergences among the main adjustment equations and the resulting simulation outcomes.