CHAPTER 1 - PROJECT PURPOSE AND STRUCTURE

Abstract

Policymakers are using large-scale models as there is no alternative because of the complexity of potential impacts from policy decisions, but at the same time, they are skeptical of the reliability of forecasts and calculations from models. There is also great acceptance by the populace at large regarding the results coming from computer analyses that in their minds seem to represent the epitome of technological solutions to problems. Analyses are seen as more believable as they are based on computer technology. This chapter discusses the use of large-scale econometric models in the debate over national economic policy. The most prominent among these large-scale models used in economic policy planning by government include Data Resources, Inc. (DRI), Chase and Wharton modeling efforts. Apart from the use of econometric models in general economic planning by government, there has been a major surge of new computer modeling for purposes of energy policy planning and analysis. The disciplines of economics, operations research, statistics, urban and regional planning, and engineering are heavily involved in quantitative approaches to modeling systems of the real world. The chapter discusses the major task to improve the usefulness of models and the judgments of professionals involved in public policy analysis. The central issue is the procedures by which the reliability of large-scale models, especially those used in public policy work, can be established and made transparent to distinguish between the influence of professional, subjective judgments, and the influence of information that is reproducible by others. The Texas National Energy Modeling Project (TNEMP) has made some contribution to the goal of increased model credibility by transferring and operating Midterm Energy Forecasting System (MEFS).