Measuring regional manufacturing production: An analysis for the Spanish regions

In a big amount of economies (NUTS-I) the evolution of manufacturing production is analysed using Gross Domestic Product (GDP) and Gross Added Value (GAV) data from National Accounts. In Spain, the problem of using these data is that they are not available as soon as it would be desirable. In consequence, it is not possible to analyse the short term evolution of the industrial output through them. To solve these problems the Institute of Statistics of Spain (Instituto Nacional de Estadistica -INE-) constructs a monthly Industrial Production Index (IPI) from data belonging to a survey addressed to firms. At a regional level (NUTS-II), the difficulties to monitor the evolution of manufacturing production are even bigger due to the nearly absence of official data. During the last years, different public and private institutions have started to construct indices for some Spanish regions, but they do not use an homogeneus methodology and the indices are not directly comparable. In this paper, we summarize and extent the main results of previous studies about the possibility of using different indirect methods to analyse the short term evolution of regional industrial production. In concrete, two statistic and an econometric method are considered. First, we study the possibility of extending the methodology proposed by the Regional Institute of Statistics of Catalonia (Institut d'Estadistica de Catalunya -IEC-) to other Spanish Regions. Second, we analyse the relationships between electric energy consumption for industrial purposes and industrial production. Third, following Israilevich and Kuttner (1993), we apply a state-space model to obtain estimates of the industrial production indices using the Kalman Filter and the method of maximum likelihood. Next, to validate the indices obtained through these three methods we compare them with regional indices obtained by direct methods for the regions where they exist. Finally, we expose the main conclusions remarking the implications for public policy in relation with elaboration of regional statistics.

Commuting in Catalonia: Estimates from a place-to-place model

Commuting consists in the fact that an important fraction of workers in developed countries do not reside close to their workplaces but at long distances from them, so they have to travel to their jobs and then back home daily. Catalonia (a Spanish region) is divided in 41 comarcas or small aggregations of municipalities (smaller than NUTS-3 level). Some of them have a positive commuting balance, attracting many workers from other comarcas and providing local jobs for almost all their resident workers. On the other side, other comarcas seem to be mostly residential, so an important fraction of their resident workers hold jobs in other comarcas. Which variables influence the comarca's role as an attraction pole or a residential zone? In previous papers (presented to the ERSA and Spanish Regional Science Association Congresses) we have brought out the main individual variables that influence commuting by analysing a sample of Catalan workers and their commuting decisions. Anyway, the comarcal economical structure has been analysed only at a descriptive level. Variables influencing comarcal quality of life ("amenities") have almost been ignored due to the lack of enough territorial disaggregation in the sample. These variables are supposed to influence commuting in two different ways: A zone with a dense, well-developed economical structure will have a high density of jobs. Work demand cannot be fulfilled with resident workers, so it spills over comarcal boundaries. On the other side, this economical activity has a series of side-effects like pollution, congestion or high land prices which make these comarcas less desirable to live in. Workers who can afford it may prefer to live in less populated, less congested comarcas, where they can find cheaper land, larger homes and a better quality of life. The penalty of this decision is an increased commuting time. Our aim in this paper is to highlight the influence of comarcal economical structure and comarcal amenities dotation in the workplace-residence location decision. A place-to place commuting model is estimated in order to find the economical and amenities variables with higher influence in commuting decisions. Data have been obtained from aggregate flow travel-matrix from the 1991 Spanish Population Census.

Specialization in Europe and asymmetric shocks: Potential risks of EMU

One of the most obvious consequences of a monetary union is that monetary policy is lost as an instrument of national macroeconomic policy. The loss of the exchange rate as a national policy instrument has important implications for macroeconomic stability in the presence of asymmetric shocks, unexpected shocks that do not affect every nation in an equal way. The empirical literature on Optimum Currency Areas has concluded that the probability of asymmetric shocks to occur at a national level has tended to diminish in the Economic and Monetary Union (EMU) as a result of the intensification of the integration process during the most recent years. Therefore, since Economic Geography Theories predict an increasing specialisation of regions as a result of reallocation of industrial activity, the degree of asymmetry of industry-specific shocks will be specially relevant to determine if benefits overweight the costs associated to EMU. Previous studies, such as Bayoumi and Eichengreen (1995), Helg et al. (1995) or Ghosh and Wolf (1997), have examined to what extent sectoral asymmetric shocks have been relevant in the past using, mainly, static measures of asymmetries such as the correlation coefficients between series of sectoral shocks previously calculated from VAR or sVAR models (Blanchard and Quah, 1989; Blanchard and Katz, 1992). In this paper, we study the evolution of industry-specific asymmetries in Europe from a dynamic point of view (applying the methodology proposed by Boone, 1997) in order to obtain new evidence about the potential risks of EMU in the scenario proposed by Economic Geography Theories.

Study on the feasibility of a tool to measure the macroeconomic impact of structural reforms

The main aim of this study is to assess the feasibility of empirical tools to study the impact of structural reforms on the macroeconomic performance in the member countries of the European Union (EU). This report presents the results of the project "Study on the feasibility of a tool to measure the macroeconomic impact of structural reforms" (ECFIN-E/2005/001) and amalgamates the findings of the two previous interim reports and the main conclusions of the workshop held in Brussels on May 11th. The main goal of the project is to determine the most reliable and robust methods to investigate the impacts of economy-wide structural reforms as well as reforms in individual markets or sectors, and to make suggestions as to how they best to implement them and possible improvements of the institutional dataset. In addition, a roadmap has been created which includes the main steps in the model-developing process, and solutions feasible even in the short term are discussed.The most relevant conclusion to be drawn from the study is that the most appropriate tool that can be developed in the short term is the integration of a DSGE model (preferably QUEST due to its in-house availability) with different satellite models, to be developed.structural reforms, product markets, labour markets, financial markets, Dreger, Art�s, Moreno, Ramos, Suri�ach

The Enlargement of the European Union and the Spatial Distribution of Economic Activity

One of the challenges facing regional policy in the European Union is the accession of new countries to the Single Market and to Economic and Monetary Union. Conditions in many of these East European regions are worse than in the least developed regions of the fifteen existing member states. Moreover, the accession of these countries is likely to have a marked effect on the geographical distribution of economic activity in the rest of the European Union (EU). Taking this into account, this article discusses the lessons that we have learned from the latest adhesions to the EU, in order to be able to predict what will arise from the enlargement scheduled for mid-2004. In this sense, we compute specialization and concentration indexes in order to highlight the effects of enlargement on the spatial distribution of activity in the EU. Additionally, inequality measures are calculated to describe the evolution of regional disparities before and after enlargement. A regional and national database for EU15 and for candidate countries with a high degree of sectoral detail from 1985 to 2001 is compiled. Analysis and some recommendations for regional policy are provided.

What Have We Learned from the Changeover to the Euro?: Lessons for Accession Countries from Catalonian Firms

The objective of this paper is to identify the factors with the greatest influence on the changeover process and to quantify how company policy and traits have informed currency adoption. Special attention is given to the role of the public sector in facilitating the currency changeover process. With this aim, we estimate different logit models using micro data from three data surveys, from 1999, 2000, and 2001, taken from a representative sample of eurozone firms located in Catalonia, Spain. The findings of the paper clearly underline the role of the public sector in the success of the changeover process and provide policy advice for countries in the process of acceding to the European Union and, subsequently, to the eurozone.