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Historical Simulations with the MONASH Regional Equation System

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  • Brian R. Parmenter
  • Andrew Welsh

Abstract

MONASH-RES combines a top-down regional equation system with the MONASH dynamic model of Australia to produce regional forecasts or policy analysis. Experience indicates that MONASH-RES gives acceptable rankings of regional economic prospects but understates inter-regional differences. We investigate the model's properties by attempting to reproduce observed patterns of State/Territory economic performance from 1986-87 to 1993-94. Industries are classified either as national, producing commodities that are readily traded between regions, or as local, producing goods or services that are not traded between regions. Regional outputs of national industries are assumed to be independent of regional demand for them but regional outputs of local industries must meet regions' demands. The results demonstrate that MONASH-RES forecasts are improved significantly by the inclusion of region-specific macro data and accurate information about the regional distribution of output changes in national industries. They confirm that the treatment of local industries in MONASH-RES is satisfactory.

Suggested Citation

  • Brian R. Parmenter & Andrew Welsh, 2000. "Historical Simulations with the MONASH Regional Equation System," Centre of Policy Studies/IMPACT Centre Working Papers op-95, Victoria University, Centre of Policy Studies/IMPACT Centre.
    • Handle: RePEc:cop:wpaper:op-95
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    References listed on IDEAS

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    1. Daina McDonald & Peter B. Dixon, 1988. "The Australian Economy: 1987–88 and 1988–89," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 21(2), pages 3-26, June.
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    Cited by:

    1. Ghaith, Ziad & Kulshreshtha, Suren & Natcher, David & Cameron, Bobby Thomas, 2021. "Regional Computable General Equilibrium models: A review," Journal of Policy Modeling, Elsevier, vol. 43(3), pages 710-724.

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    More about this item

    JEL classification:

    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
    • R13 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - General Equilibrium and Welfare Economic Analysis of Regional Economies

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