The MONASH-USA Model

MONASH-USA is a 500 industry dynamic computable general equilibrium model of the US economy being developed at the Centre of Policy Studies in collaboration with the US International Trade Commission. The model is known in the United States as USAGE-ITC.

The starting point for MONASH-USA is the MONASH model of Australia. In common with MONASH, MONASH-USA is designed for four modes of analysis:

• Historical, where we estimate changes in technology and consumer preferences;
• Decomposition, where we explain periods of economic history in terms of driving factors such as changes in technology and consumer preferences;
• Forecast, where we derive basecase forecasts for the macro economy and industries that are consistent with trends from historical simulations and with available expert opinions; and
• Policy, where we derive deviations from basecase forecast paths caused by assumed policies.

Also in common with MONASH, MONASH-USA is being equipped with add-on (or tops-down) programs that generate results for:

• Regions, the 50 states plus the District of Columbia;
• Occupations, about 700 Bureau of Labor Statistics employment categories; and
• Adjustment costs, taking account of the effects of policy changes on flows of people betweens regions and occupations and into and out of employment.

At this stage we have completed historical and decomposition simulations for 1992 to 1998, see G-143 and G-144. We have also created the regional add-on program, see G-145 and G-146. The regional add-on was featured in the US International Trade Commission's report on The Economic Effects of Significant U.S. Import Restraints, June 2004 (Publication 3701).

Inquiries about consultancies using MONASH-USA should be addressed to Professor Peter Dixon and Dr Maureen Rimmer.

The map below illustrates some results from a MONASH-USA simulation: it shows the effect on employment by state of removing import tariffs.