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<br />(2) <br /> <br />The projections and measures provided by the model, however, should be <br /> <br />interpreted in the light of the assumptions and limitations which are embodied <br /> <br />in this particu lar \IlOde ling methodo logy. Some of the major assumptions and <br /> <br />limitations have already been described above. These and other potential <br /> <br />shortcomings of the approach will be discussed in more detail in what follows. <br /> <br />Fixed Coefficients The fixed coefficients which characterize sector <br /> <br />interactions per unit of output presume a linear, homogeneous production <br /> <br />function over all levels of output. While the coefficient estimation employed <br /> <br />here attempts to anticipate technological change there will be some changes <br />J <br />(especially those involving the interaction of technological choice and <br /> <br />relative price) which, no doubt, will not be captured. Moreover, the linear <br /> <br />nat)lre of the production relationships cannot be modified in this framework; <br /> <br />at best, one can only make linear approximations of any nonlinearities 'n <br /> <br />/ <br /> <br />production. <br /> <br />The fixed character of input-output coefficients is especially limiting <br /> <br />in the case of the coefficients which represent interregional trade. Trade <br /> <br />coefficients have been observed to be more volatile than process <br /> <br />coefficients. Mitigating this concern to a certain extent is the fact that <br /> <br />the array of interregional trade coefficients are sparse and have very small <br /> <br />entries. <br /> <br />Fixed coefficients do not allow for other dynamic features of economic <br /> <br />growth observed by economists: agglomeration economies and economies of <br /> <br />scale. As a region grows, the basic sectors of the region tend to attract <br /> <br />additional, similar types of activity to the region (agglomeration) and as <br /> <br />regions grow, the larger markets for goods previously imported to the region <br /> <br />now attract producers of those goods to the region. Both of these forces <br /> <br />would tend to accelerate or sustain growth beyond the "development" scenarios <br />