State-level Dynamic CGE Modeling for Forecasting and Policy Analysis

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Dixon, Peter and Rimmer, Maureen T (2003) State-level Dynamic CGE Modeling for Forecasting and Policy Analysis. Working Paper. Centre of Policy Studies (COPS).


In computable general equilibrium (CGE) modeling there are two broad approaches to generating regional results: bottoms-up and tops-down. We describe both, providing illustrative examples from our experience in Australia. We then describe USAGE, a 500-order dynamic CGE model of the US that we are developing in collaboration with the US International Trade Commission. Tops-down State results from USAGE will be available in a relatively short time. With a longer time horizon, it will be possible to create a bottoms-up version of USAGE. Tops-down applications will be adequate for analysis of economy-wide shocks such as changes in Federal policies. Bottoms-up modeling will be required for analysis of shocks in which the essence is a change in relative costs across regions.

Additional Information

CoPS/IMPACT Working Paper Number IP-82

Item type Monograph (Working Paper)
Official URL
ISBN 0732615410
Subjects Historical > FOR Classification > 1403 Econometrics
Current > Division/Research > Centre of Policy Studies (CoPS)
Keywords D58; USAGE model; regional modeling; Federal policies
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