Europe and the Latin Arc Countries
New Horizons in Regional Science series
Edited by Roberto Camagni and Roberta Capello
Roberta Capello and Ugo Fratesi 4.1 QUANTITATIVE FORESIGHTS AT REGIONAL LEVEL As mentioned in the previous chapters of this book, the world economic crisis has given rise to long-term breaks in the structural features of the economy stemming from recent emerging contradictions: demand based on debt in many advanced countries; growth of the financial sector in Western economies; Brazil, Russia, India and China (BRICs) supporting Western consumption with low-price goods; Western real income decreasing because of high inflation; and financing the US trade deficit (by buying US treasury bonds). As a consequence, at the end of the crisis, the balance of the geo-political game will be different, and winning assets will be different as well; the dollar may no longer be the sole reference currency for international exchanges; and a ‘regionalized’ globalization will take place. Needless to say, all these structural breaks will have strong effects on the possible future economic trajectories of regions in Europe. This chapter presents advanced scenario-building and simulation exercises for the devising of anticipatory and far-sighted development strategies and regional policies in an era of structural breaks brought about by the economic downturn. It describes a reference scenario, built on the assumption that structural breaks take place, a proactive scenario reflecting the hypothesis that structural changes will be perceived and even anticipated, and a defensive scenario, in which changes will not be understood by economic actors. The chapter is devoted to developing quantitative foresights on the three integrated scenarios presented in Chapter 3. In particular,...
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