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In any economic analysis, regions or municipalities should not be regarded as isolated spatial units, but rather as highly interrelated small open economies. These spatial interrelations must be considered also when the aim is to forecast economic variables. For example, policy makers need accurate forecasts of the unemployment evolution in order to design short- or long-run local welfare policies. These predictions should then consider the spatial interrelations and dynamics of regional unemployment. In addition, a number of papers have demonstrated the improvement in the reliability of long-run forecasts when spatial dependence is accounted for. We estimate a heterogeneouscoefficients dynamic panel model employing a spatial filter in order to account for spatial heterogeneity and/or spatial autocorrelation in both the levels and the dynamics of unemployment, as well as a spatial vector-autoregressive (SVAR) model. We compare the short-run forecasting performance of these methods, and in particular, we carry out a sensitivity analysis in order to investigate if different number and size of the administrative regions influence their relative forecasting performance. We compute short-run unemployment forecasts in two countries with different administrative territorial divisions and data frequency: Switzerland (26 regions, monthly data for 34 years) and Spain (47 regions, quarterly data for 32 years).

The employment is a main economic variable whose evolution has shown different dynamics within the European Union. Recent papers have recovered the significance of the sectoral factors in the explanation of the regional growth. In this sense, shift and share analysis has been considered an extremely useful technique and a standardization procedure has been developed to decompose the regional growth into three components: the national effect, the industry-mix effect and the competitive effect. Although shift and share analysis has been widely used in the explanation of the differences of growth between regions, this method has been criticized since its classical formulation does not allow to test hypotheses. Therefore, stochastic models have been developed as an extension of classical shift and share analysis, allowing the implementation of inferential processes and forecasting tools. The aim of this paper is to analyze the recent evolution of the employment in the European Union, developing a stochastic shift and share model and testing the sources of regional and sectoral differences.

The analysis of different economic situations and risk factors is necessary in order to properly define forecasting scenarios. In this paper we focus on the shift-share model as a useful tool in the definition of scenarios, based on the different components contributing to the change of a given economic variable (national, sectoral and competitive effects).
Although the most commonly used methodology is based on the "constant shift" and "constant share" hypotheses, additional options can be considered leading to more realistic scenarios. More specifically we propose a dynamic shift-share formulation, allowing time changes in both the sectoral structure and the level of the considered variable.
Once this new option has been developed, this approach is applied to define scenarios and forecast the regional employment in Asturias using the information provided by the Spanish Economically Active Population Survey (Encuesta de Población Activa, EPA).

This paper studies the determinants of local tax rates. For the two main local taxes in Spain - the property tax and the motor vehicle tax - we test the existence of tax mimicking, yardstick competition and political trends in a sample of 2,713 municipalities. Using different spatial models, the results support the hypothesis of tax mimicking, with coefficients over 0.40. We also show the relevance of political variables such as the ideology of the incumbents and political fragmentation. The fact that incumbents with weaker political support display stronger mimicking behaviour is interpreted as evidence in favour of yardstick competition. Finally, we find incumbents mimic neighbouring municipalities ruled by the same political party, confirming the political trends hypothesis.