Dynamic regional multipliers and the economic base: An application of applied econometric techniques

This paper considers recent developments in econometrics that have helped to resolve the apparent dichotomy between time-series analysis and dynamic econometrics. In particular, the paper shows how the concepts of cointegration and error-correction models can be used in the estimation of dynamic regional multipliers. Using the results of a pilot study for Northern Ireland it is shown how the techniques provide a new method for estimating the economic base, and an encompassing approach to early conflicting results.