Economic Models at CoPS

Models of the Australian Economy

VU-National, formerly known as MONASH, is a dynamic model of Australia. It is designed for forecasting and policy analysis. The model is used to: estimate changes in technologies and consumer preferences; explain historical development in terms of driving factors; provide forecasts for industries, regions and occupations; and generate policy effects as deviations from business-as-usual forecast paths. Current versions of VU-National distinguish up to 140 industries, 56 regions and 340 occupations. VU-National is the basis of labour market and income distribution forecasts made on a regular basis by the CoPS team. There are many published policy applications of MONASH and VU-National on the effects of taxes, tariffs, environmental regulations and competition policy.

MONASH was a development of the ORANI model which was also built by members of the CoPS team. Developed in the late 1970s, ORANI has been widely recognized as a significant contribution to economic methodology. Since then ORANI and descendant models have been used by the Commonwealth Government, especially the Productivity Commission.

VURM, formerly known as MMRF, is a dynamic model of Australia's six states and two territories. It models each region as an economy in its own right, with region-specific prices, region-specific consumers, region-specific industries, and so on. Since VURM is dynamic, it is able to produce sequences of annual solutions connected by dynamic relationships. The model also includes enhanced capabilities for environmental analysis, and a regional disaggregation facility that allows results for the six states to be disaggregated down to 56 sub-state regions. VURM is ideally suited to determining the impact of region-specific economic shocks, and has been used to address a wide range of issues, including the economic impacts of various large export-oriented projects, the effects of global trading in greenhouse emission permits, and the effects of changes in state and federal tax rates.

TERM is another multi-regional model of Australia, similar to VURM (the two models are based on the same data). However, TERM allows more regions to be modelled in a "bottoms-up" manner. A version may be purchased.

See also Comparison of CoPS regional CGE models.

Models of Other Countries

ORANI-G is a generic single-country model which has been adapted for many countries outside Australia. CRUSOE is a simplified version of ORANI-G, designed for use with a freely downloadable set of national databases covering most regions of the world.

USAGE is a 500 industry dynamic computable general equilibrium model of the US economy being developed at the Centre of Policy Studies in collaboration with the US International Trade Commission.

Mini-USAGE is a miniature version of USAGE. Our aim in creating Mini-USAGE is to reduce barriers to entry into the world of MONASH-style dynamic general equilibrium modelling. By providing Mini-USAGE, we hope to give modellers a tool for understanding the theory, construction and computing of MONASH-style models and for interpreting results. For this purpose, Mini-USAGE is unencumbered by detail.

Versions of TERM have been prepared for Brazil, China, Finland, Indonesia, Italy, Japan, Korea, New Zealand, Poland, South Africa, Sri Lanka, Sweden and USA. The USA version may be purchased.

Teaching Models

CoPS has created several models specifically for teaching. These are described here.