METHODOLOGICAL BACKGROUND AND SCOPE OF … · 2015 GWS mbH Page 2 World Resources Forum Davos, October 2015 Outline 1. Methodological background System of National Accounts (SNA)

Münster, Mai 2015WWW.GWS-OS.COM / © GWS 2015

METHODOLOGICAL BACKGROUND

AND SCOPE OF GINFORS

“System dynamics and econometric approaches: potential and limits of

modeling resource efficiency” World Resources Forum, Davos 2015

Mark Meyer

Gesellschaft fur Wirtschaftliche Strukturforschung (GWS) mbH

2015 GWS mbH Page 2 World Resources Forum Davos, October 2015

Outline

1. Methodological background

System of National Accounts (SNA) & Macroeconomics

Econometric modelling

2. Disaggregated models developed and maintained by GWS

INFORGE, Panta Rhei, GINFORS

3. Dynamic Multi-Region Input-Output Modelling: GINFORS

4. GINFORS: Exemplary model outcomes

WWW.GWS-OS.COM / © GWS 2015

1.Methodological background

Empirical database: System of National Accounts (SNA)

Sequence of Accounts and Balancing Items (SABI)

Input Output (IO) Tables


1. System of National Accounts

► Why do we base our modelling on these datasets?

Data quality: Three necessary requirements should be fulfilled

I. objectivity,

II. reliability,

III. validity.

© Springer-Lehrbuch (Winker, 2010)


► Classification and accounting schemes hamonised by the United Nations

► First international standard published in 1953


Source: http://ec.europa.eu/eurostat/web/products-manuals-and-guidelines/-/KS-02-13-269


© Pearson Studium (Case, Fair & Oster, 2015)


► Macroeconomics in a nutshell



► System of Accounting and Balancing Items (SABI): Detailed mapping of circularincome flows, incomedistribution and resultingwealth effects.



► System of Accounting and Balancing Items (SABI)

Exemplary view on

German macroeconomicfigures for 2011

Source: Statistisches Bundesamt (2012)



Wassily Leontief (1973): Nobel Prize “for the development of the input-output method and for its application to important economic problems“.

► Input-Output Tables

Source: Nobelprize.org, Statistisches Bundesamt


II II II

III

IIIS

up

ply

of

Go

od

s

Final Demand

Valu

e A

dde

d

Interm. Demand


► Input-Output Tables

Detailed mapping of

I. industry specific supplychains,

II. their interrelationships withfinal demand categories,

III. sectoral income generation.


1.Methodological background

Econometric modelling


1. Econometric modelling

► Building blocks Identities, example:

GDP = Private consumption expenditures

+ Governmental consumption

+ Gross Investment

+ Exports

- Imports



► Building blocks Reaction functions, didactic example: Macroeconomic consumption expenditures of private households• C = C (Y)

• marginal propensity to consume:

• Keynes‘ “fundamental psychological law”

Specification

• a: “autonomous consumption”

;bY

C

10 b

0a;bYaC


1991 1994 1997 2000 2003 2006 2009

79

01

00

51

22

01

43

51

65

0

Verfügbares Einkommen

Konsum der privaten HH


► Statistical data analysis based on economic theory

Source: Statistisches Bundesamt



Ko

nsu

m d

er

pri

va

ten

HH

1010 1160 1310 1460 1600

88

01

15

01

42

0





Ko

nsu

m d

er

pri

va

ten

HH

1010 1160 1310 1460 1600

88

01

15

01

42

0

C = 10,5 + 0,89 ∙Y



Source: Statistisches Bundesamt, own calculations



Jan Tinbergen (1969): Nobel Prize (together with Ragnar A. K. Frisch) "for having developed and applied dynamic models for the analysis of economic processes”

► Large scaled multi-equation models

© Cambridge University Press (Morgan, 1992)


2. Main dynamic disaggregated models developed and

maintained by GWS

INFORGE

PANTA RHEI

GINFORS


2. Dynamic models developed by GWS

Clopper Almon(1967): Foundation of INFORUM(INterindustryForecasting at the University of Maryland) Source: C. Almon (1991). The INFORUM Approach to

Interindustry Modeling. Economic Systems Research, Vol. 3, No. 1

► GWS’s modelling philosophy

“INFORUM […] a group devoted to dynamic modeling with input-output detail and forecasting, policy analysis, and research based on those models.

INFORUM models are […] internationally-linkable, dynamic, interindustry models which imitate as closely as possible the way the economy behaves.”



Bernd Meyer (1996): Foundation of GWS(carrying on previousacademic work withinthe INFORUM group)

► GWS’s modelling experience

“A recent literature review by Uno (2002) identifies 34 simulation models with global coverage that have been developed since 1993, […]

Only seven models endogenise the economy and only two have a sectoral disaggregation deep enough to allow the distinction of different groups of goods and services.

These are the GINFORS model (Lutz et al., 2005) and the GTAP model.”

(Wiedmann et al. (2007). Examining the global environmental impact of regional consumption activities […]

Ecological Economics, 61)

“As regards including materials in economic models, two macroeconomic models, E3ME and GINFORS, already include a treatment of material demands.” (European Commission 2011)



► National models

► PANTA RHEI, selective model applications:

Energy scenarios for the German energy concept (BMWi, 2010),

Employment impacts of renewable energy in Germany (BMU, since 2004),

Energy reference scenario for Germany (BMWi, 2013).

► Economic part of the model (INFORGE), selective applications:Medium-term labour market outlook (Fed. Labour Agency, 2010-2014),

Industry analyses for private clients (since 2007),

Socio-economic reporting (BMBF, 2009-2012).



► Global model, based on more than 1.8 million time series

► GINFORS, selective model applications:

Macroeconomic modelling of sustainable development and the links

between the economy and the environment (MACMOD, DG ENV,

2010 - 2011),

Policy Options for a Resource-Efficient Economy (FP7-POLFREE,

since 2012),

Modelle, Potenziale und Langfristszenarien für Ressourceneffizienz (SimRess, UFOPLAN FKZ 3712 93 102, since 2013).


3.Dynamic Multi-Region Input-Output Modelling

Why ?

How?


3. Dynamic MRIO Modelling

© Pearson Studium (Blanchard & Illing, 2009)

► Why ? – Lasting globalisation trends



Source: Dittrich, Giljum, Lutter, & Polzin, 2012

► Why ? – Accelerating global material use



Source: A. Y. Hoekstra and T. O. Wiedmann (2014), Humanity's unsustainable environmental footprint. Science 344.

► Why ? – Surging needs for global footprint assessments



► How ? – We would prefer GINFORS


4.GINFORS: Exemplary model outcomes

Country coverage

Applied SABI accounting scheme

MRIO applications



Lfd. Nr Land, bzw. Region

20 Dänemark

21 Ungarn

22 Lettland

23 Litauen

24 Polen

25 Rumänien

26 Schweden

27 Vereinigtes Königreich

28 Russland

29 Türkei

30 Brasilien

31 Kanada

32 Mexiko

33 Vereinigte Staaten

34 China

35 Indien

36 Japan

37 Korea

38 Australien

39 Rest of World

Lfd. Nr Land, bzw. Region

1 Österreich

2 Belgien

3 Zypern

4 Estland

5 Finnland

6 Frankreich

7 Deutschland

8 Griechenland

9 Irland

10 Italien

11 Luxemburg

12 Malta

13 Niederlande

14 Portugal

15 Slowakei

16 Slowenien

17 Spanien

18 Bulgarien

19 Tschechien

► Country coverage


Corporations Government

Private

households &

NPISH

Rest of World

S.11+S.12 S.13 S.14+S.15 S.2

V.1 External account of goods and services

B.11 External balance of goods and services

II.1.1 Generation of income accountB.1g Gross value added at basic prices

D.1 - Compensation of employees - uses

D.29 - Other taxes on production

D.39 + Other subsidies on production

B.2g = Gross operating surplus

B.3g + Gross mixed income

II1.2 / V.II Allocation of primary income accountD.1 + Compensation of employees - resources

D.2 + Taxes on production and imports

D.3 - Subsidies on production and imports

D.4 + Property income - resources const.

D.4 - Property income - uses

B.5g = Balance of primary incomes

II.2 / V.II Secondary distribution of income account

D.4 +Current taxes on income, wealth, etc.

(resources)const.

D.5 - Current taxes on income, wealth, etc. (uses) const.

D.61+D.62 -Social benefits other than social transfers in

kind (uses)const.

D.61+D.62 + Social contributions and benefits (resources)

D.7 - Other current transfers (uses)

D.7 + Other current transfers (resources) const.

B.6g = Gross disposable income

B.12 = Current external balance

II.4.1 Use of disposable income account

D.8 -Adjustment for the change in net equity of

households on pension fundsconst. const.

P.3 - Final consumption expenditure

B.8g = Gross saving

III.1 / V.III Capital account

P.51 - Gross fixed capital formation

P.52 - Changes in inventories

P.53 - Acquisitions less disposals of valuables const.

D.9 - Capital transfers, payable const. const.

D.9 + Capital transfers, receivable const. const.

K.2 -Acquisitions of non-produced non-financial

assetsconst. const. const. const.

B.9 = Net lending (+) / Net borrowing (-)

Government debt

explained by internal relationsships within the

variable held constant

explained by variables of the IO module

variable given by definition

explained by variables of the IO module + exogenous policy variable


► Economic core: Applied SABI accounting scheme

Source: M. Meyer, M. Distelkamp, G. Ahlert and B. Meyer (2013), Macroeconomic Modelling of the Global Economy-Energy-Environment Nexus – an Overview of Recent Advancements of the Dynamic Simulation Model GINFORS. gwsDiscussion Paper 2013/5.


0

1

2

3

4

5

23 - 14 23 - 15 23 - 16 23 - 17 23 - 18 23 - 19 23 - 20

Prozentuale Abweichung ggü SSP1 Baseline

Exportpreis für Produkte des Maschinenbaus

0

1

2

3

4

5

6

7

23 - 14 23 - 15 23 - 16 23 - 17 23 - 18 23 - 19 23 - 20


Importpreis für Produkte des Maschinenbaus

-2.8

-2.4

-2.0

-1.6

-1.2

-0.8

-0.4

0.0

23 - 14 23 - 15 23 - 16 23 - 17 23 - 18 23 - 19 23 - 20


Exporte von Produkten des Maschinenbaus

-10

-8

-6

-4

-2

0

23 - 14 23 - 15 23 - 16 23 - 17 23 - 18 23 - 19 23 - 20


Importe von Produkten des Maschinenbaus


► Economic core: Sector studies (example: Tax on Machinery & equipment products in Germany, foreign trade effects)

Source: Own calculations



► MRIO modelling: Historical footprint calculations




► MRIO modelling: Annual comparisons by material categories

0

2

4

6

8

10

12

14

Esto

nia

- 07

Gre

ece

- 07

Irel

and

- 07

USA

- 0

7C

zech

Rep

ublic

- 0

7A

ustr

alia

- 0

7Lu

xem

burg

- 0

7Po

land

- 0

7G

erm

any

- 07

Aus

tria

- 0

7Fi

nlan

d -

07Sl

oven

ia -

07

Can

ada

- 07

Bel

gium

- 0

7D

enm

ark

- 07

Kore

a -

07B

ulga

ria

- 07

Swed

en -

07

Japa

n -

07EU

27 -

07

Uni

tedK

ingd

om -

07

Rom

ania

- 0

7N

ethe

rlan

ds -

07

Turk

ey -

07

Slov

akia

- 0

7Sp

ain

- 07

Ital

y -

07Li

thua

nia

- 07

Rus

sia

- 07

Chi

na -

07

Fran

ce -

07

Cyp

rus

- 07

Hun

gary

- 0

7M

alta

- 0

7La

tvia

- 0

7W

orld

- 0

7Po

rtug

al -

07

Mex

ico

- 07

Indi

a -

07R

oW -

07

Bra

zil -

07

Coal: Per Capita Raw Material Consumption

0

1

2

3

4

5

6

USA

- 0

7Lu

xem

burg

- 0

7A

ustr

alia

- 0

7G

reec

e -

07Li

thua

nia

- 07

Bel

gium

- 0

7A

ustr

ia -

07

Den

mar

k -

07Fi

nlan

d -

07C

anad

a -

07N

ethe

rlan

ds -

07

Ital

y -

07G

erm

any

- 07

Japa

n -

07U

nite

dKin

gdom

- 0

7Fr

ance

- 0

7Ko

rea

- 07

Cyp

rus

- 07

Irel

and

- 07

Spai

n -

07Sl

oven

ia -

07

Mal

ta -

07

Swed

en -

07

EU27

- 0

7H

unga

ry -

07

Slov

akia

- 0

7Po

rtug

al -

07

Cze

chR

epub

lic -

07

Esto

nia

- 07

Latv

ia -

07

Rom

ania

- 0

7Tu

rkey

- 0

7M

exic

o -

07R

ussi

a -

07Po

land

- 0

7B

ulga

ria

- 07

Wor

ld -

07

Bra

zil -

07

Chi

na -

07

RoW

- 0

7In

dia

- 07

Gas&Oil: Per Capita Raw Material Consumption

0

5

10

15

20

25

30

35

40

Irel

and

- 07

Finl

and

- 07

Slov

enia

- 0

7Po

rtug

al -

07

Aus

tria

- 0

7C

ypru

s -

07D

enm

ark

- 07

Spai

n -

07Es

toni

a -

07U

SA -

07

Gre

ece

- 07

Rom

ania

- 0

7La

tvia

- 0

7EU

27 -

07

Cze

chR

epub

lic -

07

Aus

tral

ia -

07

Kore

a -

07Sw

eden

- 0

7Fr

ance

- 0

7C

hina

- 0

7It

aly

- 07

Pola

nd -

07

Mal

ta -

07

Ger

man

y -

07Li

thua

nia

- 07

Bul

gari

a -

07Tu

rkey

- 0

7Sl

ovak

ia -

07

Rus

sia

- 07

Hun

gary

- 0

7Ja

pan

- 07

Wor

ld -

07

Net

herl

ands

- 0

7C

anad

a -

07M

exic

o -

07Lu

xem

burg

- 0

7U

nite

dKin

gdom

- 0

7B

razi

l - 0

7R

oW -

07

Indi

a -

07B

elgi

um -

07

Non-Met.Minerals: Per Capita Raw Material Consumption

0

2

4

6

8

10

12

14

Aus

tral

ia -

07

Luxe

mbu

rg -

07

Swed

en -

07

Can

ada

- 07

Irel

and

- 07

Aus

tria

- 0

7Fi

nlan

d -

07Ko

rea

- 07

Pola

nd -

07

Den

mar

k -

07Ja

pan

- 07

USA

- 0

7B

elgi

um -

07

Gre

ece

- 07

Ital

y -

07G

erm

any

- 07

Spai

n -

07Sl

oven

ia -

07

Net

herl

ands

- 0

7C

ypru

s -

07Fr

ance

- 0

7EU

27 -

07

Uni

tedK

ingd

om -

07

Esto

nia

- 07

Mex

ico

- 07

Lith

uani

a -

07M

alta

- 0

7C

zech

Rep

ublic

- 0

7Po

rtug

al -

07

Slov

akia

- 0

7La

tvia

- 0

7H

unga

ry -

07

Rom

ania

- 0

7Tu

rkey

- 0

7C

hina

- 0

7B

ulga

ria

- 07

Rus

sia

- 07

Wor

ld -

07

Bra

zil -

07

RoW

- 0

7In

dia

- 07

Ores: Per Capita Raw Material Consumption

International Comparison of Abiotic Material Demand Patterns (Raw Material Equivalents)



Thank you for your attention.

Mark Meyer

T +49 (0) 40933 - 290

E m.meyer [at] gws-os.com

Head of division

Global Developments & Resources


www.gws-os.com

Gesellschaft für Wirtschaftliche Strukturforschung mbH

Heinrichstr. 30

49080 Osnabrück

Tel + 49 (0) 541 40933-290

Fax + 49 (0) 541 40933-110

+49 (0) 541 40933-100

Documents

METHODOLOGICAL BACKGROUND AND SCOPE OF … · 2015 GWS mbH Page 2 World Resources Forum Davos, October 2015 Outline 1. Methodological background System of National Accounts (SNA)