Spatial econometric analysis of spatial general equilibrium |
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| Authors: | Michael Beenstock Daniel Felsenstein Dai Xieer |
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| Institution: | 1. Department of Economics, Hebrew University of Jerusalem, Jerusalem, Israel;2. Daniel.felsenstein@mail.huji.ac.il Department of Geography, Hebrew University of Jerusalem, Jerusalem, Israel.;3. dxieer@gmail.com Department of Economics, Hebrew University of Jerusalem, Jerusalem, Israel. |
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| Abstract: | A structural spatial econometric model for nine regions of Israel is estimated using non-stationary spatial panel data during 1987–2015. The model focuses on the relation between regional markets in labour, housing and capital when there is imperfect internal migration between regions, when capital is imperfectly mobile between regions, and when building contractors operate across regions. Since the regional panel data are non-stationary, the econometric methodology is based on spatial panel cointegration. The estimated model is used to simulate the temporal and spatial propagation of regional shocks induced, for example, by regional policy (land for housing, regional investment grants). Impulse responses are temporally and spatially state dependent. They are also highly persistent because of longevity in housing and capital. |
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| Keywords: | spatial general equilibrium (SGE) regional labour markets regional housing markets internal capital mobility spatial econometrics |
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