Resilience in a behavioural/Keynesian regional model

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This paper constructs a regional dynamic macroeconomic model with an eclectic, broadly Keynesian and behavioural flavour. The model, which is parameterized on Scottish data, is used to identify the impact of expectations and business confidence on regional resilience. Simulations compare the evolution of the regional economy after a temporary negative export shock under a range of investment functions. The mainstream perfect foresight formulation generates a reduction in activity, which is small and is limited to the duration of the shock. The heuristic-based, imperfect-information investment models produce more negative, longer-lasting and unstable adjustment paths.

Original languageEnglish
Article number53(4)
Pages (from-to)858-876
Number of pages19
JournalEnvironment and Planning A
Issue number4
Early online date13 Jul 2020
Publication statusPublished - 1 Jun 2021


  • macroeconomics
  • Keynesian model
  • computable general equilibrium

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