A Review of Inforum's Iliad Model

A more detailed input-output model has been developed at Inforum as a companion to the LIFT model. This model is has been named Iliad (for Interindustry Large-scale Integrated And Dynamic model of the U.S.). Iliad is a 360-sector model of the U.S. economy, forecasting all components of final demand and value added, as well as prices and employment. In addition to Iliad and Lift, several other U.S. models also are available, including a quarterly macroeconomic model, a national demographics model, and regional models.

The model currently operates in 2000 constant dollars, and is based on a benchmark 1997 input-output table, which is updated in the forecast using across-the-row coefficient change projections. Iliad is the first model of the U.S. that was built using Inforum's Interdyme framework, which is a system for building Interindustry Dynamic Macro Economic models. Interdyme is a C++ system of class libraries and programs that has been designed for estimating equations, working with vectors and matrices, and developing input-output/macroeconomic models. Since the Iliad model is built in Interdyme, the extension of the model to include new vectors and matrices, such as occupational or regional share matrices, is facilitated. The Interdyme system also provides programs for fixing (specifying) exogenous assumptions and add-factors, and comes with the flexible table-making program called Compare. Compare also provides the capability of producing matrix listings for Iliad, which show the sources of demand for each product (row listing), or the direct input requirements (column listing) needed to produce each product.

Iliad also forecasts employment, value added components, and prices, at the 360-sector level. The Interdyme modeling framework provides a useful infrastructure for the modeling of industry level and macro variables, and foreseeable improvements to Iliad are the addition of macro forecasting capabilities, and the addition of detailed equations for the final demand and value added categories.

The Iliad model currently relies on the Inforum LIFT model for more aggregate drivers. The user of Iliad can either use LIFT variables to directly index the growth of the corresponding detailed sectors in Iliad , or use existing equations to forecast the detailed industries, and then control them to LIFT growth rates or levels. At present, most vectors in Iliad are indexed forward with the corresponding LIFT variable. Equations exist for employment and imports, which can then be scaled to conform with LIFT totals, if so desired.

Iliad is installed with a base run already linked to a LIFT forecast. Using the industry fix capabilities, as well as other capabilities of the Vam program, mentioned below, the user of Iliad can make adjustments to the forecast, without having to re-run LIFT . Alternatively, if most of the exogenous scenario inputs are at the macro level, LIFT can be re-specified, and then a run of Iliad consistent with LIFT can be generated automatically.

A key component of the Interdyme software is the Vam (Vectors and Matrices) program. If you are familiar with the G regression program, then you are already somewhat familiar with Vam , which uses many of the same commands as G , but also a full set of commands for dealing with vectors and matrices. Model results can be viewed immediately -- without going through any other program -- either numerically, in spreadsheet form, or in a wide variety of graphs. The graphs can be printed on laser printers or written as Tiff files for inclusion in documents prepared with a word processor. Vam can also be used to modify or set the exogenous input data of the model. The databank file that the Vam program works with is called a VAM file, with the file extension .VAM. In the Iliad system, a version of this file containing historical data is first projected forward using a linking program to conform to LIFT forecast movements. Then the forecasting model is run, using a copy of the VAM file created by the linking program.

The names of the vectors and matrices used in Iliad are shown in the list below. Most of these vectors are currently linked to LIFT in the forecast. The employment (emp) and imports (im) vectors have their own equations. As the Iliad model evolves, it will be more able to forecast on its own through the addition of final demand and value added forecasting equations. The Interdyme framework also allows for the incorporation of macroeconomic variables within Iliad.

Input-output and bridge matrices
am The A matrix
Final demands by producer
def Federal Defense
ndf Federal Nondefense
edu State & Local Education
oth State & Local "other"
hlh State & Local Health and Related
sdc Output Discrepancy
ex Exports
pceio PCE by I-O Sector
im Imports
ven Inventory Change
pde PDE by I-O sector
cstio Structures by I-O sector
fd Total final demand
Outputs and employment
out Output by I-O Sector
qcu Current Dollar Output by I-O Sectors
qpeak Peak Output (For Employment Equations)
Across-the-row coefficient change indexes
ami A- and C-matrix coef chg indexes

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