A dynamic model for simulating resource development program impacts in the Interlake area of Manitoba

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Tung, Fu-Lai
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Federal and Provincial Governments have been involved in attempts to improve the low income and unemployment situations in the Interlake Area of Manitoba by means of pulic investment of $85 million in natural, social and human capital during the period of 1968-77... The basic purpose of this study, therefore, is to develop a model for analyzing the accumulative long-run economic impacts of resource development programs on structural change in the agricultural sectors and their contributions to related sectors of the economy in the study area. More specific objectives of this study are: (1) to explore a method to incorporate changes in trade and primary resource imput coefficients in an input-output model with particular reference to agricultural sectors; (2) to establish a set of economic development indicators to assess program impacts for public concerns; (3) to project economic development indicators specified in five target years, 1971, 1976, 1977, 1981 and 1986; and (4) to simulate impacts of resource development programs, drainage, land clearing and farm management training programs, on selected economic development indicators to assess the program effectiveness. To meet the objectives, a 24 sector input-output model constructed for the Interlake Area is used as a framework. The 24 sector input-output model is modified in constructing three alternative simulation models referred to as static, comparative static and dynamic simulation models. Each simulation model includes the resource constraints, labor and land, so that the realized gross output is determined not only by the demand factors but also by supply constraints. The static simulation model is the conventional input-output model neglecting changes in trade or technical coefficients as well as primary input requirement coefficients over time. The comparative static simulation considers the changes in trade coefficients as well as primary input requirement coefficients over time but investment is assumed to be exogenously determined. The dynamic simulation model permits the trade and primary input requirement coefficients to change over time. In addition, investment is determined endogenously by the dynamic simulation system...