Macro-economy - POLES

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Model Documentation - POLES

Corresponding documentation
Previous versions
Model information
Model link
Institution JRC - Joint Research Centre - European Commission (EC-JRC), Belgium,
Solution concept Partial equilibrium (price elastic demand)
Solution method SimulationRecursive simulation
Anticipation Myopic

In POLES key macro-economic assumptions are exogenous: population and growth if GDP per capita. Information comes from external sources: population usually from the UN Population Prospects (latest: the 2012 revision), GDP information from international sources (IMF, MIT, CEPII, national and regional estimates, ..). The consistency between population and income assumptions is checked.

An on-going work will allow connecting POLES to the macro-econometric model MAGE (CEPII) through the use of an "energy factor" in the MAGE production function, allowing to use a more dynamic relation between GDP and energy.

The key marco-economic assumptions are then derived into sectoral economic activity variables:

  • sectoral value added depend on the level of development of the country / region, given by the GDP per capita;

36405548.png Figure 1. Share of value-added as a function of GDP per capita

  • industrial physical production depends on demand, which is itself depending on the level of development;
  • mobility (for passengers and for goods) depends on the cost of transport compared to income, and is declined in equipment rates, degree of utilisation of this equipment, etc.. ;
  • building surfaces depend on households size (cohabitation) and surface per dwelling, both depending on personal income.

All variables also depend on historical data, that capture local specificities.