A Johansen model for regional analysis

A ‘bottoms-up’ regional model of the Johansen class allowing for price substitution, flexibility in classifying and reclassifying variables into exogenous or endogenous categories, and ease of computation, is constructed to demonstrate the attractiveness of Johansen type models for regional analysis. These models have been used extensively by international trade theorists with success, but surprisingly they have not caught the attention of regional economists.