Multi-regional dynamic general equilibrium modeling of the U.S. economy : USAGE-TERM development and applications PDF
Preview Multi-regional dynamic general equilibrium modeling of the U.S. economy : USAGE-TERM development and applications
Advances in Applied General Equilibrium Modeling Glyn Wittwer Editor Multi-regional Dynamic General Equilibrium Modeling of the U.S. Economy USAGE-TERM Development and Applications Advances in Applied General Equilibrium Modeling Series editors James Giesecke, Victoria University, Melbourne, Australia Peter B. Dixon, Victoria University, Melbourne, Australia Robert Koopman, World Trade Organization, Geneva, Switzerland This series has a companion series in SpringerBriefs in Applied General Equilibrium Modeling. The series publishes advances in the theory, application, parameterisation and computationofappliedgeneralequilibrium(AGE)models.AGEanalysisisnowan essential input in many countries to the discussion of a wide range of economic topics relevant to public policy. This reflects the capacity of AGE models to carry extensive economic detail, their flexibility in accommodating new policy-relevant theoryanddata,andtheircapacitytoprojecteconomicoutcomesforalargenumber of macroeconomic and microeconomic variables. Topics in AGE modeling addressed by the series include: macroeconomic forecastingandadjustment;publicfinance;economicgrowth;monetarypolicyand financial markets; environmental policy; energy policy; income distribution and inequality; global modeling; country-specific modeling; regional modeling; economic effects of natural disasters and other catastrophic events; productivity; demography; foreign direct investment; economic development; model solution algorithms and software; and topics in estimation, calibration and validation. AGEapplicationsareincreasinglymulti-disciplinary,spanninginputsfromsuch diverse fields as engineering, behavioral psychology, energy modeling, land use modeling, demography, and climate modeling. The series allows for the compre- hensive documentation and careful exposition of not only the AGE models themselves, but also the inter-disciplinary inputs to the modeling, and the interactions between each. For AGE modelers, the series provides a format supporting: clear exposition of data work, attention to the theoretical modeling of relevant policy detail, and thorough discussion of simulation results. This aids both academic and policy readerships. Academic readers will appreciate: the capacity to see details of the full complexity of relevant components of model equation systems; comprehensive documentationofdatamanipulationalgorithms;supportinganalysisanddiscussion ofmodelinputandclosureassumptions;andcarefuldiscussionofresultsgrounded in AGE theory, data and closure assumptions. Policy readers will appreciate: a format that supports the reporting of the comprehensive set of model outputs of interest to policy makers; discussion of elements of the theory and data that exert a heavy influence on research findings; and nuanced and qualified discussion of the policy implications of AGE research. More information about this series at http://www.springer.com/series/13860 Glyn Wittwer Editor Multi-regional Dynamic General Equilibrium Modeling of the U.S. Economy USAGE-TERM Development and Applications 123 Editor GlynWittwer Centreof Policy Studies Victoria University Melbourne, VIC Australia ISSN 2520-8268 ISSN 2520-8276 (electronic) Advances in AppliedGeneral Equilibrium Modeling ISBN978-3-319-58864-3 ISBN978-3-319-58866-7 (eBook) DOI 10.1007/978-3-319-58866-7 LibraryofCongressControlNumber:2017939616 ©SpringerInternationalPublishingAG2017 Thisworkissubjecttocopyright.AllrightsarereservedbythePublisher,whetherthewholeorpart of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission orinformationstorageandretrieval,electronicadaptation,computersoftware,orbysimilarordissimilar methodologynowknownorhereafterdeveloped. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publicationdoesnotimply,evenintheabsenceofaspecificstatement,thatsuchnamesareexemptfrom therelevantprotectivelawsandregulationsandthereforefreeforgeneraluse. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authorsortheeditorsgiveawarranty,expressorimplied,withrespecttothematerialcontainedhereinor for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictionalclaimsinpublishedmapsandinstitutionalaffiliations. Printedonacid-freepaper ThisSpringerimprintispublishedbySpringerNature TheregisteredcompanyisSpringerInternationalPublishingAG Theregisteredcompanyaddressis:Gewerbestrasse11,6330Cham,Switzerland Preface The compilation of regional data so as to prepare an early version of USAGE-TERM did not seem at first to be a massive task. It soon became evident that proper documentation would be time-consuming. Detailed documentation, technical refinements, and model applications have taken a number of years. USAGE-TERM follows in the footsteps of the dynamic USAGE model of the US economy developed by Peter Dixon and Maureen Rimmer over many years. Many of the research memoranda, working papers, and publications authored by Peter and Maureen in devising the USAGE model are cited in the volume. Some of the model enhancements implemented in USAGE have been adopted in USAGE-TERM. USAGE-TERM development has been the culmination of a team effort. Peter DixonandMaureenRimmerhavebroughtthemodeltolifethroughcommissioned projectsoriginatingfromvariousUSfederaldepartments.MarkHorridgepioneered the TERM approach to CGE modeling. The first application of TERM concerned drought in Australia late in 2002. More recently, Mark and other GEMPACK specialists, Michael Jerie, Florian Schiffmann, and Dean Mustakinov, have responded to the growing technical demands of model users as the theory and database of the model have grown. Without clients, many of the enhancements of USAGE-TERM would not have been developed. The contributors to this volume are grateful to CREATE at USC, the MITRE Corporation, the Department of Homeland Security, and the US Department of Commerce for their commissioned projects using the model. The Centre of Policy Studies (CoPS) moved to Victoria University early in 2014. We are grateful to Vice-Chancellor Peter Dawkins for the opportunity to continue research in a new setting. v vi Preface The saddest recent event in CoPS has been the passing of Ken Pearson in May 2015. He was a selfless, devoted, brilliant colleague. His grand vision of GEMPACKsoftware as atool tospare theCGE modelerfrom the need toacquire specialist programming skills has enlarged the CGE community. Every working day at CoPS, we use the software that remains Ken’s legacy. Melbourne, Australia Glyn Wittwer January 2017 Contents 1 Beyond Regional Input–Output Modeling.... .... .... ..... .... 1 Glyn Wittwer, Janine Dixon and John Madden Part I Sectoral Detail in USAGE-TERM 2 Agriculture and Mining in Regional United States. .... ..... .... 21 Glyn Wittwer 3 Manufacturing Industries in the United States.... .... ..... .... 41 Glyn Wittwer 4 Regional Electricity Supply in the United States... .... ..... .... 65 Glyn Wittwer 5 Regional Health Care, Education, International Trade, Other Services and Household Consumption . .... .... ..... .... 83 Glyn Wittwer 6 Tourism and Transport in a CGE Model and an Illustrative Application. .... .... .... .... .... ..... .... 99 Glyn Wittwer Part II Potential Household and Fiscal Extensions 7 Enhancing the Links Between Income Sources, User Expenditures and Taxes in a CGE Database . .... .... ..... .... 115 Janine Dixon 8 Fiscal Accounts in Regional CGE Modeling .. .... .... ..... .... 135 John Madden vii viii Contents Part III Model Preparation 9 Preparing a Database for Dynamic CGE Modeling .... ..... .... 153 Glyn Wittwer 10 Top-Down Extensions to Represent Counties and Congressional Districts and Moving to Bottom-Up. ..... .... 173 Mark Horridge and Glyn Wittwer Part IV Model Applications 11 Modeling California’s Drought. .... .... .... .... .... ..... .... 195 Glyn Wittwer 12 The Economic Effects of a Hypothetical Nuclear Attack on Downtown LA .. .... ..... .... .... .... .... .... ..... .... 211 Peter B. Dixon, Maureen T. Rimmer and Glyn Wittwer About the Authors . .... .... ..... .... .... .... .... .... ..... .... 229 Index .... .... .... .... .... ..... .... .... .... .... .... ..... .... 233 Contributors Note: All authors are at the Centre of Policy Studies Janine Dixon Centre of Policy Studies, Victoria University, Melbourne, VIC, Australia Peter B. Dixon Centre of Policy Studies, Victoria University, Melbourne, VIC, Australia Mark Horridge Centre of Policy Studies, Victoria University, Melbourne, VIC, Australia John Madden Centre of Policy Studies, Victoria University, Melbourne, VIC, Australia Maureen T. Rimmer Centre of Policy Studies, Victoria University, Melbourne, VIC, Australia Glyn Wittwer Centre of Policy Studies, Victoria University, Melbourne, VIC, Australia ix
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