John Carruthers, Mundy Associates LLC, Seattle, WA, USA, Gordon Mulligan, Department of Geography and Regional Development, University of Arizona, Tucson, AZ, USA, Gudmundur Freyr Ulfarsson, Washington University
School of Engineering & Applied Science, St. Louis, USA
ALTERNATIVE EQUILIBRIUMS - AN ANALYSIS OF ESTIMATORS FOR A 3-EQUATION REGIONAL ADJUSTMENT MODEL (assigned to theme
This paper examines differences among equilibrium solutions produced by alternative estimates of a three-equation a regional adjustment model (Carruthers and Mulligan 2004; 2005). Specifically, the model—which contains equations for population, employment, and income and is based on a panel data set that includes all counties located in the continental United States—is estimated using two-stage least squares (2SLS), three-stage least squares (3SLS), the generalized method of moments (GMM), and the Arreano-Bond (1991) estimator for linear, dynamic models. The purpose of the analysis is to shed new light on the nature of the steady state that regional adjustment models emulate and explore how sensitive it is to alternative modeling approaches. The main contribution of the paper is to identify the best technique/s for estimating this increasingly popular class of growth models.
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