A regionalized national Input-Output – Modell for Chile (COFORCE) Methodology and Applications

Anett Großmann (), Svenja Schwarz, Frank Hohmann () and Anke Mönnig ()
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Anett Großmann: GWS - Institute of Economic Structures Research
Svenja Schwarz: GWS - Institute of Economic Structures Research
Frank Hohmann: GWS - Institute of Economic Structures Research
Anke Mönnig: GWS - Institute of Economic Structures Research

No 20-3, GWS Discussion Paper Series from GWS - Institute of Economic Structures Research

Abstract: The research project “Development of sustainable strategies in the Chilean mining sector through a regionalized national model” – funded by the German Federal Ministry of Education and Research – analyses the socio-economic impacts of copper on the Chilean economy. For this, the model COFORCE (COpper FORecasting in ChilE, www.coforce.cl) was developed from scratch. First, a macro-econometric input-output (IO) model for Chile (COFORCE) was built in line with the INFORUM (Interindustry FORcasting at the University of Maryland) modelling approach to forecast and simulate the impact of copper industry on the overall economy. Second, due to the importance of Chilean copper exports, the COFORCE model is linked to the bilateral trade model TINFORGE which captures among other world trade of copper between 153 countries. The national COFORCE model receives export demand and import prices from the world model according to its global market shares. Third, the COFORCE model was regionalized by using an Interregional Input-Output table developed by partners in Brazil (Haddad et al. 2018). The national and 15 regional models for Chile are linked via final demand components and industries by applying a top-down approach. Therefore, regional economic growth is mainly driven by the industry structure and inter- and intraregional trade. This set of three projection and simulation models considers the main aspects regarding copper: 1. It is the main exporting product, 2. It has a huge impact on the economic development and 3. The copper industry is regionally differently concentrated. The modelling tools are applied for the evaluation of alternative economic scenarios, e. g. copper export scenarios at the national and subnational level. The main focus of this paper is to introduce the methodology used to regionalize the national model COFORCE, to explain the main transmission channels and to present regional modelling results. The national model COFORCE and the underlying model philosophy and characteristics are explained in detail in Mönnig/Bieritz 2019. Section 4 shows examples of applications and how to implement scenarios by using the graphical user interface solver(c) (see section 4.1). which includes the underlying data set (historic data and forecasted) and supports the user in scenario design.

Keywords: Model Building; Input-Output; Sustainable Mining; Copper (search for similar items in EconPapers)
JEL-codes: C67 R11 R15 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2020
New Economics Papers: this item is included in nep-cmp, nep-geo and nep-hme
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