AN ECONOMETRIC MODEL OF NEW YORK CITY.
Item
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Title
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AN ECONOMETRIC MODEL OF NEW YORK CITY.
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Identifier
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AAI8023676
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identifier
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8023676
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Creator
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ROY, JHARNA.
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Contributor
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Harold M. Hocman | Herbert Geyer
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Date
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1980
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Language
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English
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Publisher
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City University of New York.
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Subject
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Economics, General
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Abstract
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This dissertation, apparently the first attempt to develop a small-scale macroeconometric model for New York City, focuses on the construction, estimation, and testing of such a model. It will be useful to planners, industrialists, and fiscal managers for understanding the structure of the local economy and studying the growth and decline of the city. By its ability to measure in a simple way the impacts of changes in GNP and policy variables on local economic and fiscal variables, the model can serve as a useful tool in decision-making procedures. Further, used as a forecasting model, it can predict the magnitude of local economic and fiscal variables.;The development of the model was accomplished in four stages: (1) construction of gross city product data by industry and government; (2) indentification and classification of industries into export-market-, mixed-market-, and local-market-oriented depending upon the type of market(s) they primarily serve; (3) specification of the equations in the model using relevant variables; and (4) estimation of the model.;The model divides the economy into two sectors, the private economy sector and the local government sector. For the private sector, equations are specified for output, employment, and money wages for each of five groups of major industries. The model is primarily demand-oriented. The output of each group of industries is dependent on the relevant demand variable(s), national or local, as the case may be. In addition, employment in each major industry group depends on output by the respective industry group and the ratio of cost of capital to cost of labor.;The local government sector contains two tax base equations and an expenditure equation. Both tax bases are related to the personal income of the city's residents. The local government operating expenditure is postulated to be positively related to both availability of funding and the demand for public services. The major linkage between the two sectors (private and local government) is provided by gross city product identity and the use of personal income (PY) as a predetermined variable in the equations for both private and local government sectors.;Because of the special characteristics of New York City's economy, this model differs considerably from earlier small-scale models of other regions in the nation. The differences can be summarized as follows: (1) grouping of the city's industries and their classification; (2) treatment of the local government sector; and (3) specification of the equations. However, in its broad features, this model resembles earlier models.;The "goodness" of the model is tested by conducting an ex post simulation. Judging by the results, the model seems to have an overall good fit in a simulation context.;For instance, MAPE statistics show that it is able to track the historical data series closely. The results of an ex post forecast of important local variables suggest that the model is able to forecast reasonably well over a short period.;A multiplier simulation and two policy simulations are performed with the model. A significant finding of the multiplier simulation is that the impact elasticity of gross city product with respect to gross national product is low (0.53). But this is comparable to results obtained for Mississippi state and the Los Angeles SMSA. The policy simulations consider changes in intergovernmental aid and real estate tax rate.;Some suggestions for future improvement of the model are presented in the last chapter.
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Type
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dissertation
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Source
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PQT Legacy CUNY.xlsx
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degree
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Ph.D.
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Program
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Economics
