Dynamic General Equilibrium Modelling for Forecasting and Policy: A Practical Guide and Documentation of MONASH (Contributions to Economic Analysis, 256)

This book describes MONASH, a dynamic computable general equilibrium (CGE) model of the Australian economy. In standard applications, MONASH is run with about 100 industries. Via a suite of add-on programs, results can be generated for 57 sub-national regions, 340 occupations and numerous types of households.

Our aim in building MONASH was to make a practical contribution to economic decision-making in Australia. In trying to achieve this objective, we have produced a model with several innovations which will be of interest to economists even if they have no particular concern for Australian problems. These innovations are largely associated with closures. With different closures MONASH produces: estimates of changes in technologies and consumer preferences (historical closure); explanations of historical developments such as the rapid growth since the mid-1980s in Australia's international trade (decomposition closure); forecasts for indust