Spurred by the need to understand these effects, we are currently developing an ambitious and innovative regional model called NiREMS (National Institute Regional Economic Modelling System). This model currently produces projections for the 12 NUTS1 Government Office Regions in the UK, and it is planned to be extended to major city-regions.
What does NiREMS Do?
Utilising data from our Global Econometric Model (NiGEM), our Lifetime Income Distributional Analysis (LINDA) model and the Sectoral Economic Model (NiSEM), NiREMS employs a combination of three approaches.
- a new generation econometric spatial panel data model, accommodating spatial (regional) heterogeneity together with the effects of global shocks (factor structure) and local shocks (inter-regional spillovers).
- linking the econometric model with a growth accounting approach, to exploit regional variations in sectoral composition as evidenced in regional composition data from ONS and from Round 6 of the UK Wealth and Assets Survey. This approach builds upon the NIESR’s current projections of sectoral trends the using NiSEM, and is founded upon the well-established structural macroeconomic model NiGEM
- dynamic microsimulation using the microsimulation model LINDA
Projections from the three approaches are combined and calibrated against aggregate projections from the latest NiGEM data projections.
