University of Maryland Conference: Abstracts of Papers
Session I - Policy Issues
Inflation in Russia During the Period of Economic Reforms, by Georgy Serebryakov.
ABSTRACT: Inflation was a key problem in the economic environment
in Russia during the 1990s. This paper discusses the dynamics of inflation
in Russia during that period, with an eye to aiding the modeling of future inflation
within the context of the RIM model. A key factor in this inflation was the
depreciation of the ruble and the "dollarization" of economic transactions.
However, the evolution of prices in the energy sectors was also very important.
One important component of energy prices is the price of electricity. The end
of the paper discusses an exercise done with RIM to investigate the inflationary
impact of an increase of tariffs in the electric power sector.
Structural Change and Competitiveness: An Analysis Based on Jidea 5, by Takeshi Imagawa.
ABSTRACT: This study performs and industry by industry analysis of the competitiveness of the Japanese economy during the period 1985 to 1999, based on the newly available database of the Jidea 5 model. The goal of the study is to use an index of Real Comparative Advantage (RCA) to find turning points. A dummy variable regression was used to determine the importance of the end of the bubble to downturns in competitiveness. The finding is that the turning points differ by sector, but many are clustered near 1991.
Session II - Modeling Showcase
The Influence of the New Industry Classification on the Mudan Model, by Pan Shengchu .
ABSTRACT: Since China's reform and the opening of its economy,
there have been two major classification systems used for Chinese industry
data, GB82 and GB94 With the rapid expansion of the
tertiary sector and the entry into the WTO, a more current classification
system is needed. The new classification system (called GB200X for the moment)
has been the basis for the development of new I-O tables and industry data.
This paper details some of the classification changes made in the new system,
and outlines their incorporation into a new version of the Mudan model.
The FuturCanada Model, by Ronald Carre.
ABSTRACT: The FuturCanada model is a structural analytic model for the Canadian economy, with a forecast horizon to 2021. In addition to modeling the national economy, it forecasts inter-regional bilateral trade flows between 13 regions (10 provinces and 3 territories) of Canada in a consistent manner. The model works in a bottom-up fashion, building the national aggregates from regional input-output results. The paper describes the analytical framework of the model, and in the presentation Ronald also presented some of the software he has developed for viewing results and making model assumptions.
- Also see The Demand System for Private Consumption for Thailand: An Empirical Analysis
The Interindustry Dynamic Macroeconomic Model of Thailand, by Somprawin Manprasert.
ABSTRACT: This presentation highlighted Somprawin's research plan for the development of an Inforum-style model of Thailand. Included were an outline of the structure of the national accounts in Thailand; the proposed solution flow of the model; as well as details of the sectoring plans. A system of consumption equations in PADS has already been developed, and estimation results were presented.
ABSTRACT: Miguel described ongoing work to modernize the MIDE model of the Spanish economy, using the latest Interdyme software and techniques, as well as bringing the database up to the most current year. The new model will be based on an Input-Output table for 1996. Miguel also described the development of the MEDEA regional model of Andalusia, which was the subject of a large study by Fundacion Tomillo.
ABSTRACT: In this talk, Margaret presented the results of three simulations of the current version (July 2002) of the IdLift model of the U.S. Economy. These simulations were:
- A higher dollar with respect to the euro and the yen
- A higher federal personal income tax rate
- Lower investment in producers' durable equipment
The magnitude of each of these "shocks" was similar, and they were sustained throughout the forecast period. The purpose of the simulations was to examine the response of the model to the shock. Adverse effects of the shocks show persistence. The discussion dealt the the question of how long such persistence should last.
- Section 3 of the paper provides a nice description of the structure of a typical Inforum model, the Inforum Bilateral Trade model and the INTIMO model of Italy. Section 4 explores the development of the assumptions for three scenarios. Section 4 also summarizes the non-tariff barriers currently existing in the 13 candidate countries, and describes the approach to estimating the removal of these barriers. Section 5 summarizes the impacts of EU enlargement on Italy. Section 6 describes consumption impacts in Italy, and section 7 draws conclusions.
Session III - Personal Consumption and Cohort Analysis
Cohort, Age and Year Effects on Italian Household Consumption, by Rossella Bardazzi
ABSTRACT: The work on this paper addresses the effect of population aging on consumer spending. It reviews the typical Inforum approach to including age effects via adult-equivalency weights. However, the work of Bardazzi goes beyond the typical PADS analysis of consumption by including both year and cohort effects on consumption. Cross-sectional data from 1985 to 1996 was used to construct the cohort data, and a decomposition was made between cohort, age and year effects. The cohort analysis is better able to explain demographic influences on consumption for many important sectors, including Fats and oils, Alcoholic beverages, TV, radio and technical instruments and Financial services. The technique is attractive, and may show promise for other Inforum models.
ABSTRACT: Li Ding is also experimenting with the cohort analysis of consumption using data from the CEX for the U.S. He presented his research plan, sectoring scheme, and some preliminary issues in the development of his regressions.
Session IV - The New Europe
Computing a Time-series of Input-output Tables Consistent with SNA 1993 / NACE Rev.1, by Martin Distelkamp.
ABSTRACT: With the new SNA 93 and the new statistical classification of economic activities in the European Community (NACE Rev. 1), model builders are faced with the problem that there is no longer a consistent time-series of input-output data available in one conceptual framework. Martin has recently completed work to create a time series of input-output tables from 1991 to 2000 based on the new concepts. The paper describes the conceptual framework of working with known and unknown pieces of data much akin to modelling in historical simulatino with lots of exogenous variables.
European Enlargement: Modeling Framework and Simulations, by Maurizio Grassini.
ABSTRACT: Last year in Gerzensee, Maurizio presented a large paper that was the report of the work of the Italian team on European Enlargement. This year he focused on the aspects of the modeling framework and simulations with that study. At the outset, Maurizio makes clear that the availability of the INTIMO model of Italy, along with several similar models of European countries linked by a system of bilateral trade, made this study possible. The study horizon is from 2001 to 2010, and involves effects on 13 candidate countries, as well as the impacts on Italy. Since Italy's economy is large in comparison with the 13 candidate countries, the effects on Italy can be expected to be modest. However, they are more significant on some individual industries. Another interesting finding is that Slovenia, while small overall, is important to Italy both as a destination and an origin country for a number of trade flows.
Session V - Korea and Japan
Alternative ACROSS System for Making a Time-Series of Input-Output Tables, by Yasuhiko Sasai.
ABSTRACT: Mr. Sasai has been working for some time with an embarassment of riches with regard to I-O tables. Japanese tables have been released in three types: the "Linked" table, the "Base" table, and the "Extended" table. The Linked table and Base table are available for 1985, 1990 and 1995, whereas the Extended tables are available from 1986 to 1990, 1991 to 1995, and 1996 to 1999. Each Base table forms the basis for the following sequence of Extended tables. The ACROSS system was developed by Mr. Sasai and Clopper Almon to make a consistent time-series of Input-Output tables from this source data. The original ACROSS used a system of interpolation of differences between Base and Linked tables for the same years. This technique works well for quantity variables, but unfortunately yields strange time-series for some sectoral prices. The new technique presented in this paper uses an interpolation of ratios instead. No conclusion has been made yet as to which technique is preferable.
ABSTRACT. The secondary, or manufacturing, sector of the Japanese economy has been an important engine of growth, from the 1950s to the early 1990s. This paper documents how that sector's share of production has declined since the early 1990s. This has partly been due to changes in the intermediate structure of Japanese production and Mr. Ono presents some tables detailing these changes. Examples are provided in the Transportation machinery, Precision machinery and Pulps and pottery. In all these sectors, the fastest increasing intermediate sectors are service secors, especially the Research sector. Some interesting graphs are provided at the end of the paper, which show that some sectors are moving towards diversification of inputs, and others toward concentration
ABSTRACT: This paper describes a "horse race" of sorts, for four competing dynamic simulation models of the Japanese economy. The four models were: (1) the JIDEA model; (2) the model of the Central Research Institute of the Tokyo Electricity Company; (3) the Keio-SFC Kosaka team model; and (4) Dr. Shishido's NIRA-LINK model. Using similar exogenous assumptions, the behavior of the four models is compared. The analysis was directed by Dr. Shuntaro Shishido, the former president of PAPAIOS, the Pan Pacific Association of Input-Output Studies.
ABSTRACT: Much of the Input-Output work in Korea is unknown to American and other western audiences, since it is published only in Korean. Soo-Hee Lee describes in this paper the history of the development of the Input-Output Accounts in Korea, as well as the concurrent development of Input-Output analysis. He also gives a brief review of some of the empirical and policy applications of I-O analysis in Korea, especially in the areas of energy and the environment. Finally he outlines some plans for the future development of the KERI model and some applications of the model that he would like to undertake.
Session VI - Regional Modeling Within Inforum - I
ABSTRACT: Wang reported on work done jointly with Zuo Li, for the Science and Technology Commission and the Development Planning Commission of the province of Jiangsu. The paper describes the structure and sectoring of the model, and a flow diagram is provided in Figure 1. Results of a historical simulation exercise are also presented. The final section describes the preparation of data for the model. Wang anticipates that a more complete final report in English will be forthcoming.
ABSTRACT: This paper describes work by Gazi and his colleagues in constructing I-O tables for three subregions of Eastern Anatolia: Malatya, Erzurum and Van. Anatolia is the least-developed region in Turkey, and the project was to aid in development planning. The first section of the paper presents the development indicator used in the study. The second section moves on to describe the economic structure and growth of Eastern Anatolia for the last 10 years. The third section presents a set of three growth scenarios formulated for the region, and the fourth part introduces an investment model used to estimate total investment requirements over the planning period 2001 to 2020.
The I-O Model of the Ivanovo Region of Russia, by Marat Uzyakov
ABSTRACT: Like Eastern Anatolia in Turkey, the Ivanovo region is one of the most problematic regions in Russia, due to its low state of economic development. Marat's group, the Institute of Economics Forecasting at the Russian Academy of Sciences, was asked to build a regional model of Ivanovo for the study of development problems in the medium- to long-term period. The model will be used to assist in forming objectives, developing scenarios, and assisting in determining how to apply natural resources available in the region.
Session VII - Energy and Environment
ABSTRACT: This Powerpoint presentation describes the ADAM model, which is a large-scale macro model of Denmark, and the EMMA, which is an Environmental Satellite model that works with it. The presentation describes some of the fascinating history of ADAM and EMMA, as well as some information about the operation of the modeling groups within Statistiks Denmark.
Structural Change and its Effect on Emissions in Poland, Mariusz Plich.
ABSTRACT: This paper concentrates on structural changes in gross output
as well as their influence on the emission of air pollutants. Changes in unit
emissions are also considered. In the first stage, the influence of changes
in technologies and final users' preferences on output by industry is established.
This method was presented before at the 8th Inforum Conference. Now additional
observations have been included and a new method of presentation is used. With
these new results, it has become possible to determine the influence of structural
changes on the emission of 7 different pollutants.
Modeling the Reduction of Carbon Emissions in the U.S., Douglas Meade.
ABSTRACT: With the volatility in crude oil prices
of the last few years, the increasing dependence of the U.S. economy on imported
crude oil has become more apparent. Carbon emissions in the U.S. have been on
the rise since 1990, making the adoptions of the recommendations of the Kyoto
Protocol more difficult. Furthermore, there is no long-term policy plan to guide
public and business decision makers as to how climate change and energy policy
may evolve. Although a consensus is emerging that the U.S. needs to improve
energy efficiency and diversify sources of energy supply, suggested policies
that would reduce energy consumption and emissions are viewed as having painful
economic impacts. This paper describes a study which used the Inforum LIFT model
of the U.S. to investigate the economic results of an energy policy which is
designed to protect the environment, yet not harm the economy, or result in
unfair burdens for affected workers and firms. The findings are that U.S. carbon
emissions can be reduced significantly by 2020, with a slight increase in GDP
and employment. Oil imports fall significantly. The effect on income distribution
is slightly progressive. While the results are conditional on certain energy
efficiency assumptions, the assumptions result from technologies that are deemed
feasible and not prohibitively expensive.
Session VIII - Software Concepts
ABSTRACT: DataView is a quick tool for examining Interdyme Vam files. It
was written by Frank in Delphi, and he has added several new features this year.
In the presentation, Frank went over the operation of the program, and discussed
its future development.
Session IX- Regional Modeling Within Inforum - II
ABSTRACT: In this presentation, Doug sketched out the plan and goals for
the interregional input-output model of China. Some of the policy questions
to be examined include: (1) urban-rural income disparities; (2) great western
development; (3) agricultural restructuring; (4) reconciliation of provincial
and national data; (5) issues of economic integration; (6) WTO and the provinces;
(7) sector-specific impacts of policies by region and (8) locations of labor
shortages and surpluses. The fundamental data set for the model will be the
set of 1997 input-output tables for each of 32 provinces of China. The first
stage of the work will involve the acquisition of these tables, and the development
of additional data. The paper that Doug handed out also sketches briefly the
structure of the interregional model, which will be patterned on an earlier
model of Japan named JARIOMS.
State and County Level Modeling at Inforum, Douglas Meade.
ABSTRACT: The paper at the above link describes a county/electric utility
simulation model, with detail for 3140 counties comprising the U.S., and for
3496 electric utilities. This simulation model was developed for NRECA (National
Rural Electric Cooperative Association) for the analysis of policy issues relevent
to the electric utility sector, and their impacts on rural areas. The model
links activity by county to the utilities serving those counties, and electricity
prices from each utility affect the costs to consumers and businesses in the
counties served by each utility. The paper describes the structure of the model
and then shows an example simulation of a carbon tax, focusing on several counties
and utilities in the state of Wisconsin. In his talk, Doug also described a
state forecasting model that has been developed within the last year at Inforum.
Special Guest Lecture
ABSTRACT: In his presentation, Jeff described how the "new economy"
is continuing to significantly affect the U.S. and the international economy,
despite the end of the bubble period of 1995 to 2000. The permanent changes
brought about by the significant investments made in this period include: (1)
increasing use of value chain management; (2) the new paradigm of the lean enterprise;
and (3) the increasing globalization of all business. Jeff describes how globalization
and these new technologies are driving increased competition, and how this increased
competition spurs productivity growth.
Session X - The Craft of Economic Modeling
ABSTRACT: Clopper described the genesis of the Craft from his course notes
"How to Build a Model to Simulate the Economy" that he had been giving
since the days of punching cards for the Univac. He described the structure
of the full 3-volume work, which he will devote his attention to after his retirement
in Spring 2003. The first volume, essentially complete, is an introduction to
macro model building using G7. This volume has a new chapter at the end on the
theory of linear systems. The second volume, more than half complete, deals
with advanced topics in macro model building, such as optimization and the use
of probability theory. It uses the Quest model to demonstrate many of these
topics. The final volume, partly completed, will deal with Interdyme and the
construction of multi-sectoral models.
Solution Methods of Structural Models, Ronald Horst.
ABSTRACT: The motivation for the work presented in this paper is the optimization
routine presented by Clopper at the second Bertinoro conference in 2000, which
is also described in Volumn II of the Craft of Economic Modeling. Since the
optimization technique requires that a model be solved many times, any method
to improve the speed of convergence is crucial. Ron describes experiments using
two alternatives to the traditional Gauss-Seidel version of fixed-point iteration.
These are the successive under-relaxation and successive over-relaxation techniques.
The paper summarizes the construction of a program that sets up and solves a
small Keynesian model with each type of solution technique.
ABSTRACT: Frank introduced this presentation by describing how many of
his clients are now using PDAs as their primary information tool, and that they
had expressed great interest in having databases and model simulation banks
available on their PDAs. Frank has written software to display Inforum databanks
in spreadsheet and graphical form on PDAs, and gave both a PowerPoint and live
presentation of this software.
Japanese Accelerator-Multiplier Model - JAMI, Yasuhiko Sasai.
ABSTRACT: During the last year, Mr. Sasai has published the Craft of Economic Modeling in Japanese. However, this is much more than a translation. In developing the book, Mr. Sasai developed working models using data from the Japanese National Accounts. In addition, he produced a working CD-ROM that professors and students can use to learn G7 and modeling. Mr. Sasai has used his own students to test this software. In his talk, and in the above paper, Mr. Sasai describes JAMI, the Japanese Accelerator-Multiplier Interaction Model. One of the challenges of constructing this model is that the Japanese data is based on the System of National Accounts (SNA), which is quite different from the National Income and Product Accounts (NIPA) used in the U.S. Since just about every country except the U.S. uses the SNA, this paper sheds light on the development of AMI models for European and other countries.