Many economic geographers and regional analysts have been unhappy with the concept of "leakage" in regional economic models and have come back to the issue as to how important interregional "feedbacks" are in the real world, and whether and when they can safely be ignored. In other words, how much is gained by using interregional approaches to the analysis of single regions or much is lost by a single-region approach?

What are "Inter-Regional Feedback Effects?"
When incomes increase in region B as a result of exports to region A, region B may in turn import from region A (directly via bilateral linkages or indirectly via one or more additional, "intermediate" regions) to satisfy the input requirements for the intial exports. The resulting exports of region A are thus not truly autonomous or "basic" (in economic base terms), but are dependent on economic activity levels in the region (A) itself. Models which consider and trace such feedbacks through systems of interregional linkages can be said to "endogenize" what may otherwise have been "exogenous" stimuli.

How important are such feedback effects? It has been suggested (see literature below) that a region's received feedback "stimuli" increase with

• the region's share of national income or simply the "size" of the regional economy (Davis, p.37)
• lack of self-sufficiency
• the degree of integration of a region's economy with neighboring economies (or: lack of isolation)

Supporting  &   Related   Pages:

• Input-Output Analysis
• Economic Base Analysis
• Spatial Interaction
• Bilateral Feedacks (Abstract)

Internet Sites: 

Input - Output Economic Models, I-O models; [http://www.unb.ca/web/transpo/mynet/mty84.htm]

Input-output Analysis [www.cpac.missouri.edu/library/johnsontg/agec442/inputoutput/Inputoutput.html]

Geoffrey J. D. Hewings Ricardo Gazel Michael Sonis, The structure of multi-regional trade flows: hierarchy, feedbacks and spatial linkages [http://ideas.uqam.ca/ideas/data/Articles/spranrescv:29:y:1995:i:4:p:409-430.html] Annals of Regional Science, 29(4), 1995.

Other related papers by Hewings et al.

Krumme. G., Comments on Interregional Subcontracting Patterns and Bilateral Feedbacks," Journal of Regional Science, 10(2), August 1970, pp.237-242. (Abstract)

Metzler, L.A., A Multiple Region Theory of Income and Trade, Econometrica 18 (1950), 329-54.

Miller, Ronald E., Antonio Guccione, William J. Gillen and Peter D. Blair, "Interregional Feedbacks in Input-Output Models: The Least Upper Bound", Journal of Regional Science, Vol. 28, No. 3, August, 1988

Olfert, M.R. and Jack C. Stabler, Community Level Multipliers for Rural Development Initiatives, Growth and Change, 25(4), Fall 1994.

Olfert, M.R. and Jack C. Stabler, Multipliers in a Central Place Hierarchy, Growth and Change 30(2), Spring 1999.

Richardson, Harry, Input-Output Analysis and Regional Economics, London: Weidenfeld & Nicolson, 1972, pp.78-82.

Steele, D.B., A Numbers Game or the Return of the Regional Multipliers, Regional Studies, 6 (1972), pp.115-30.