A multiregional econometric model of Nebraska

The objective of this study is to construct a multiregional econometric model for the state of Nebraska (MREMN). The structure of this model consists of three interregionally linked submodels: one for the Lincoln SMA, one for the Omaha SMA, and one for the balance of state. Each submodel is intended to describe the economic relationships of the particular region and linkages to the other regions. The industrial sectors within each region are subdivided into two categories: private non-manufacturing and manufacturing. The private non-manufacturing sectors consist of farming; agricultural services, fisheries, and forestry; mining; construction; wholesale and retail trade; finance, insurance, and real estate; and services. Durable and non-durable manufacturing industries are the private manufacturing sectors. Each regional submodel contains equations for output, employment, unemployment rate, wages, personal income, and state/local government. The output equations include demand and supply equations for seven non-manufacturing and two manufacturing sectors. The complete MREMN contains one hundred-forty-one stochastic equations and thirty-three identities. All of these equations together constitute a system of nonlinear simultaneous equations. The data used for estimating the model is annual in frequency and spans the period 1967-84. The Gauss-Seidel algorithm is used to solve the nonlinear system of equations for the period of 1980-1984. The impact analysis in this study involves decreasing the U.S. corporate bond and mortgage rates by two percentage points in 1984. The Lincoln SMA seems to be the most sensitive to the shock