Dundee Discussion Papers in Economics 030:Policy implications in a two-region inter-regional input-output model

Two inter-regional input–output tables for the UK are used to consider three questions relating to regional policy. The two regions considered are Scotland and The Rest of the UK (RUK). It is shown that the feedbacks from RUK to the Scottish economy are of the order of 3.5%. The paper demonstrates that expenditures by government (amongst others) will have different total effects depending on the location of the initial injection. Finally, the paper shows that the input–output framework may be used to provide an estimate of the cost of regional policy where that policy is designed to create jobs, and provide a comparison of different ways of increasing employment