In this video lecture, Adrienne Johnson, Director of Research at the Economic Growth Engine in Memphis, Tennessee, provides an introduction to economic base theory, a simple, two-sector model for understanding and quantifying regional economic activity.
This model categorizes industries by the amount of production demand they create in their local economies. It’s a fundamental and often-used method of measuring activity in the regional economy, and it focuses on the production and demand side of the economy. In this module, you will learn how economic analysts:
In the video module that follows, you’ll learn the next step for applying this model to your own local economy: using multipliers to predict regional economic impacts.