The VURM Model

VURM (Victoria University Regional Model, formerly known as MMRF) model is a multi-regional, dynamic computable general equilibrium (CGE) model. It distinguishes up to eight Australian regions (six States and two Territories) and, depending on the application, up to 144 commodities/industries. The model recognises:

• domestic producers classified by industry and domestic region;
• investors similarly classified;
• up to eight region-specific household sectors;
• an aggregate foreign purchaser of the domestic economy's exports;
• flows of greenhouse gas emissions and energy usage by fuel and user;
• up to eight state and territory governments; and
• the Federal government.

The model contains explicit representations of intra-regional, inter-regional and international trade flows based on regional input-output data developed at CoPS, and includes detailed data on state and Federal governments' budgets. As each region is modelled as a mini-economy, VURM is ideally suited to determining the impact of region-specific economic shocks. Second round effects are captured via the model's input-output linkages and account for economy-wide and international constraints. Outputs from the model include projections of:

• GDP and aggregate national employment;
• sectoral output, value-added and employment by region;
• export earnings, import expenditure and the balance of trade;
• greenhouse gas emisisons by fuel, fuel user and region of fuel use;
• energy usage by fuel, energy user and region of energy use;
• State and Territory revenues and expenditures;
• regional gross products and employment; and
• regional international export earnings, international import expenditures and international balance of payments.

Numerous applications of VURM/MMRF have been commissioned by commercial and government organizations. Some of these studies simulated:

• the regional effects of national policies;
• the effects of region-specific infrastructure projects;
• the effects of alternative regional forestry policies;
• the effects of different policies to reduce Australian emissions of CO2 in line with Kyoto committments.

Enquiries about consultancies using MMRF should be addressed to Philip Adams.

MMRF3

MMRF3 is a version of MMRF, based on the model used by the Productivity Commission to analyse the Potential Benefits of the National Reform Agenda (December 2006). Documentation of the model used by the Productivity Commissions is available as item TPPA0090 in the CoPS Archive. The documentation consists of a Word document, which describes the model, and a RunDynam zip archive which contains all the necessary information to run a standard NRA simulation.

The main differences from earlier versions of the model are:

• an updated data base, reflecting the 2001-02 Australian input-output tables published in 2006;
• an improved treatment of the GST, with more comprehensive information and modelling of government finances; and
• explicit modelling of labour supply by occupational group.

An earlier working version of MMRF3 is available, see CoPS archive item TPPA0080. The zip archive contains all of the necessary TAB and CMF files, together with a 58 industry sector, 8-region Australian database. If you have access to GEMPACK software and basic GEMPACK knowledge, you can use these files to build the model and run simulations. The zip archive contains a file README.TXT with further instructions.

Documentation of MMRF and MMRF3

For an earlier technical description of the MMRF model and database see COPS archive item TPMH0051.

See a comparison of CoPS regional CGE models here

MMRF study kit for researchers

The kit is aimed at researchers who wish to construct models similar to MMRF. It contains complete documentation and source code for the original, comparative-static, version of the model. Since full-size versions of MMRF are rather computationally demanding, a smaller, aggregated, Australian database has been prepared for the kit.

For the documentation, download the following paper:

OP-85 The Theoretical Structure of MONASH-MRF,pp. 121.
Matthew W. Peter, Mark Horridge, G.A. Meagher, Fazana Naqvi and B.R. Parmenter, April 1996
(Available electronically)

MMRF model source files: A zip archive containing TAB, STI, and CMF files, together with a 5-sector 8-region Australian database. If you have access to GEMPACK software and basic GEMPACK knowledge, you can use these files to build the model and run simulations. The zip archive contains a file README.TXT with further instructions. Download 145k zip