Use Of Macroeconomic Models Research Articles

Cost of agricultural productivity loss due to soil erosion in the European Union: From direct cost evaluation approaches to the use of macroeconomic models

AbstractMuch research has been carried out on modelling soil erosion rates under different climatic and land use conditions. Although some studies have addressed the issue of reduced crop productivity due to soil erosion, few have focused on the economic loss in terms of agricultural production and gross domestic product (GDP). In this study, soil erosion modellers and economists come together to carry out an economic evaluation of soil erosion in the European Union (EU). The study combines biophysical and macroeconomic models to estimate the cost of agricultural productivity loss due to soil erosion by water in the EU. The soil erosion rates, derived from the RUSLE2015 model, are used to estimate the loss in crop productivity (physical change in the production of plants) and to model their impact on the agricultural sector per country. A computable general equilibrium model is then used to estimate the impact of crop productivity change on agricultural production and GDP. The 12 million hectares of agricultural areas in the EU that suffer from severe erosion are estimated to lose around 0.43% of their crop productivity annually. The annual cost of this loss in agricultural productivity is estimated at around €1.25 billion. The computable general equilibrium model estimates the cost in the agricultural sector to be close to €300 million and the loss in GDP to be about €155 million. Italy emerges as the country that suffers the highest economic impact, whereas the agricultural sector in most Northern and Central European countries is only marginally affected by soil erosion losses.

A new comparative approach to macroeconomic modeling and policy analysis

In the aftermath of the global financial crisis, the state of macroeconomic modeling and the use of macroeconomic models in policy analysis has come under heavy criticism. Macroeconomists in academia and policy institutions have been blamed for relying too much on a particular class of macroeconomic models. This paper proposes a comparative approach to macroeconomic policy analysis that is open to competing modeling paradigms. Macroeconomic model comparison projects have helped produce some very influential insights such as the Taylor rule. However, they have been infrequent and costly, because they require the input of many teams of researchers and multiple meetings to obtain a limited set of comparative findings. This paper provides a new approach that enables individual researchers to conduct model comparisons easily, frequently, at low cost and on a large scale. Using this approach a model archive is built that includes many well-known empirically estimated models that may be used for quantitative analysis of monetary and fiscal stabilization policies. A computational platform is created that allows straightforward comparisons of models’ implications. Its application is illustrated by comparing different monetary and fiscal policies across selected models. Researchers can easily include new models in the database and compare the effects of novel extensions to established benchmarks thereby fostering a comparative instead of insular approach to model development.

Revenue Forecasting Practices: Differences Across Countries and Consequences for Forecasting Performance

This paper reviews the practice and performance of revenue forecasting in selected OECD countries. While the mean forecast errors are small in most countries, the precision of the forecasts measured by the standard deviation of the forecast error differs substantially across countries. Based on a comparison of forecasting practices we show that these differences can be attributed to a large part to differences in the timing of the forecasts and in the tax structure. In addition, we find some evidence that differences in methods and institutions also matter for the forecasting precision. In particular, we find that the use of macroeconomic models as well as the independence of revenue forecasting are associated with a lower standard deviation of the forecast error.

Non-Linearities, Model Uncertainty, and Macro Stress Testing

A distinguishing feature of macro stress testing exercises is the use of macroeconomic models in scenario design and implementation. It is widely agreed that scenarios should be based on rare but plausible events that have either resulted in vulnerabilities in the past or could do so in the future.

Interaction between model builders and policy makers in the Norwegian tradition

Norway has a long tradition in the use of macroeconomic models for policy making. This article traces this tradition to the direct and indirect influence of Ragnar Frisch and discusses the institutional features that distinguish the Norwegian tradition from that of other countries, in particular the role of the central statistical institution in model building within government.

Use of macroeconomic models in analysis of environmental problems in Norway, and consequences for environmental statistics

Use of macroeconomic models in analysis of environmental problems in Norway, and consequences for environmental statistics

The use of macroeconomic models in economic policy making: The Norwegian experience

Planning in Norway has a long tradition. The use of models is an integral part of short- and medium-term economic policy administration. A large-scale input-output model, MODIS IV, is used as the short- and medium-term forecasting and planning model. The use of the model secures consistency when analysing the economy. The model is very open in the sense that important interrelations in the economy are left out. The model contains only ‘good’ relations in the Leif Johansen sense of the word. Smaller aggregate and more closed versions of the model are used for analysing policy alternatives. These models contain both ‘good’ and ‘bad’ relations. The use of macroeconomic models is an important aid for proposals regarding economic policy in the Ministry of Finance. Because the whole ministry (with expert help from other ministries) takes an active part in the model work, MODIS IV serves as the centralizing mechanism. It helps to make economists from many ministries go around the same centre, speak the same ‘language’ and organize all relevant information and judgements in a consistent way. Experience shows that ‘numbers discipline’ and force the different arguments on to a higher level of precision.

INFORMATION TECHNOLOGY AND EMPLOYMENT: SOME NOTES ON THE USE OF MODELLING TECHNIQUES AS A RESEARCH TOOL

This paper presents a brief review of the use of macroeconomic models in research on the employment implications of information technology. It makes particular reference to the Austrian study, Microelectronics: Applications, Diffusion and Effects in Austria. The major conclusion is that whilst such models have a value, this is dependent on assumptions made about how technology is used rather than simply upon levels of usage or rates of diffusion. It concludes with a consideration of the applicability of such techniques in the future case of advanced and integrated systems in manufacturing and the service sector.