This is an aggregated version of the Motor Vehicle Tariff application which is the main application of the MONASH Model in the MONASH Model Book.
The results reported in the book were obtained using a more disaggregated (115-commodity) data base. However the results you will obtain using the 33-commodity version are qualitatively the same and are numerically very similar.
No GEMPACK licence is required to solve the aggregated version (whereas one is required to solve the disaggregated version).
We assume here that you have already downloaded and installed the Demonstration Version of RunDynam.
Save as MCAMVSE.ZIP (6.0 Mb) in the ARCHIVE subdirectory of the directory in which you installed RunDynam.
Start RunDynam running by double clicking on the RunDynam icon on your desktop.
RunDynam will probably suggest that you start by loading an application from a ZIP archive. If so, say "Yes" and follow the instructions below.
If RunDynam does not make this suggestion, please select, from the File menu, the item
Restore Ingredients from ZIP Archive
and follow the instructions below.
Select the ZIP archive MCAMVSE.ZIP which you downloaded (see above).
You will then be asked to specify the directory to restore the files to. We suggest that you specify the MCAMVSE subdirectory of the directory in which you installed RunDynam. [Probably RunDynam will make this suggestion to you.]
Then agree to all the suggestions that RunDynam makes. At the end you should see a message saying that "Restored application is now the current application.".
Have a look at the different pages in the tabbed notebook that RunDynam shows. These are labelled Introduction, Model/Data, Sim Overview, Closure/Shock, Results, Files.
On the Model/Data page (click on the Model/Data tab to get there), you can see the name of the program MONASH.EXE which will solve the model for
each year of the Base Case and Policy runs.
You can also see the names of the starting data files. If you wish to look at the actual data, right click on the FID line in the memo "Input
Files for First Year of Base Case" and select option "View this file".
On the Sim Overview page you can see that the Base Case and Policy runs will cover 20 years, starting with data for the year 1997 and producing data for each year from 1998 to 2017.
On the Closure/Shocks page you can see the different files used for the closure and shocks for each of the 20 years of the Base Case and the Policy. Note that there are different Closure files for the different years of the Base, and different Shocks files for the different years. To see one of the closure files, right click on R02MCA.CLS (under Base Closures) and select "Edit". Be careful not to make any changes to this R02MCA.CLS file. You might also like to look at one or more of the Base Shocks files. A very detailed Base Case (that is, forecast) is produced for this application.
RunDynam is completely documented in the extensive Help file which is supplied with it. To see this, click on menu item Contents under the Help menu.
Click on the Run Base Case button near the bottom of the screen.
RunDynam will solve for the 20 years of the Base Case. [This will take 10 or so minutes.]
When the whole run has finished, you can look at the results on the Results page.
For example, click on the Spreadsheet button. You may need to tell RunDynam where your spreadsheet program (eg, Excel) is located. You will see the year-on-year results for each year of the Base Case. You should see, for example, that gdpreal (real GDP) increases by about 3.95 percent in the first year (1998), by about 3.87 percent in the second year (1999) and so on.
Since the application is concerned with a change in the planned tariff rates for imported motor vehicles, you might like to look at the results for x0ind(I14MotorVeh) which is the percentage changes in output of the motor vehicles industry. [See the row labelled x0ind(I14MotorVeh) in the spreadsheet you opened above.] Note that output is increasing each year in the Base Case (although the increases vary from year to year). The increase is 0.96 percent in 1998, almost zero in 2001 and is 2.32 percent in 2017. The average annual increase is 2.01 percent (see the last number in the x0ind(I68MotorVeh) row.]
It is a good idea to close your spreadsheet program before you continue since the spreadsheet file you have open will be accessed by RunDynam during these later runs.
Click on the ReRun Base button near the bottom of the screen. For simplicity, say "No" when asked if you want to check that the prerequisites are ok.
RunDynam will solve for the 17 years of the Base Rerun, this time using the Policy closures rather than the Base closures. Note that the Rerun starts with the simulation for the year 2001 since there are no policy shocks before that year. [This will take 10 or so minutes.]
You would expect that the results are essentially the same as for the Base Case. This is correct. However there are technical reasons (which we don't go into here) for Rerunning the Base Case before doing the Policy runs.
Again click on the Spreadsheet button on the Results page (first making sure that "Base Rerun", "All" (years) and "Year-on-year" are selected). Have a look at the results for gdpreal and x0ind(I14MotorVeh). They should be very similar to the corresponding results from the Base Case. [Note that the Rerun starts with results for year 2001 since there are no policy shocks before that year. The gdpreal results for year 2001 are 2.71587 (Rerun) and 2.71583 (Base). As you can see they are very similar.]
Click on the Run Policy button near the bottom of the screen. For simplicity, say "No" when asked if you want to check that the prerequisites are ok.
RunDynam will solve for the 17 years of the Policy. [This will take 10 or so minutes.]
When the whole run has finished, you can look at the results on the Results page.
For example, in the "Results for All/Several Years" part (the top part) of the Results page, make sure that "Differences - Policy v Base" and "Cumulative" are selected. Then click on the Spreadsheet button. You will see the cumulative differences between the Policy results and the Base Case results. You should see, for example, that the gdpreal differences are rather small. For example, the differences for years 2001 and 2002 are 0.0007 and 0.003 respectively.
Have a look at the x0ind(I14MotorVeh) results. You will see that the result for 2001 is -1.69 which means that the output of the industry will be 1.69 percent lower in Policy than in the forecast. The result for 2017 is -6.36 which means that output is 6.36 percent lower in 2017 in Policy than in the Base.
If you want to see the implications for x0ind(I14MotorVeh) graphically, proceed as follows. [This is a bit tricky so don't worry if it does not work for you.]
You may wish to compare the results you have just obtained with those in the MONASH Model book. There the results are reported based on a version of the model which recognises 115 commodities (rather than the 33 aggregated commodities in your results). However you should find that the important results for this application (for example, gdpreal and motor vehicle results) are quite similar.
You will want to read the MONASH Model book to read the authors' explanations of these results.
You can use ViewSOL to look at the results via the Graph/ViewSOL, button on the Results page. You can draw graphs from within ViewSOL (see the ViewSOL's Help menu item).
You can try other policy shocks.
You can build a different Base Case.
Don't forget the Help file.
You can solve the more disaggregated version or solve with this aggregation using rational expectations.
Go back to
Motor Vehicle Application Page
MONASH Model Page