Geoscience Reference
In-Depth Information
Fig. 11.4
Consumption shares by age, 1980s to 2020s [share of total income spent on selected
goods and services]
(
1990
,
1991
), and further developed by Israilevich et al. (
1997
), provides an
alternative perspective for impact analyses or forecasts. The CREIM, which
generates forecasts of the Chicago economy on an annual basis, with the forecast
horizon extending up to 30 years, is a computable regional general equilibrium
model, based on the Marshallian equilibrium of outputs. The model combines
traditional input-output analysis with time-series analysis. The input-output com-
ponent enables a detailed analysis of purchases and sales between industries, while
the time-series component allows for the analysis of inter-temporal change in the
transaction flows of goods and services. Together, these two components yield a
detailed analysis of structural change over time at the sectoral level.
The CREIM model is a system of linear and nonlinear equations formulated to
predict 264 endogenous variables. The CREIM identifies 53 industries and three
government sectors. For each industry, there are projections of output, employment,
and earnings. Out of the 253 equations, only 53 relate to the linear input-output
components. Many of the non input-output equations are nonlinear and estimated in
a recursive fashion. As a result, the relationships of one sector to another include the
formal input-output link as well as a set of complex links through a chain of actions
and reactions that could potentially involve the whole economy. Further details
may be found in Israilevich et al. (
1997
).
To predict the impacts of demographic changes in the Chicago region, a
modified AIDS system was integrated into the CREIM. An AIDS-type CREIM
can be constructed by including a modified AIDS system into equations of final
