Several Sets of Policy Shocks Beginning in Different Years

As you know, the Policy and Rerun begin from the first year in which the word none does not appear in the Policy Shocks column on the Closure/Shocks page.

If you have two different sets of Policy Shocks which begin (as far as RunDynam is concerned) in different years, they must be preceded by different Reruns (since the Rerun begins in the same year as its associated Policy shocks). You must take this into account when choosing Sim Names to assist with managing these different applications in the same directory.

There are two basic strategies for managing this sort of situation. We indicate them in sections 1 and 2 below.

To be concrete below, suppose that the Base contains simulations for years 2001 to 2010 inclusive. Suppose that you have two set of Policy Shocks,

•the first (LARGE tariff reductions) of which has its first nonzero shocks in the simulation for the year 2003, and

•the second (SMALLer tariff reductions) of which has its first nonzero shocks in the simulation for the year 2004.

1. Use Empty .PSH files (perhaps NONE.PSH)

When determining where the Policy and Rerun start, RunDynam does look at the contents of the .PSH files in the Policy Shocks part of the Closure/Shocks page. So, if you put a .PSH file which contains no shocks in any year, RunDynam takes this into account when determining the starting years for the Rerun and Policy.

Some modellers like to use a file they call NONE.PSH for this purpose. This file contains no shocks. Indeed it just contains a line beginning with an exclamation mark ! . GEMPACK treats this as a comment line.

In the example we are discussing here, the LARGE tariff reductions begin in year 2003 while the SMALLer ones begin in year 2004. But if you put NONE.PSH into year 2003 when setting up the SMALLer ones, RunDynam will start the Rerun and Policy for these SMALLer shocks in the year 2003 (even though there are no nonzero shocks in year 2003). This is one way of persuading RunDynam to start the Rerun and Policy in the same year for these 2 different sets of Policy Shocks.

If you use NONE.PSH (or other essentially empty .PSH files) to make all sets of Policy Shocks start in the same year, you can use the simpler management techniques which apply in such cases. These management techniques are described via a detailed example.

Indeed, some modellers always put NONE.PSH in all years at the start for which there are no Policy Shocks. This ensures that the Base, Rerun and Policy all start in the same years as far as RunDynam is concerned. This means that the spreadsheet files produced for the Base, Rerun and Policy also cover the same years.

Note that, as far as RunDynam is concerned, there distinguishes between having the word none early in the Policy Shocks column is different from having the (empty) NONE.PSH in the corresponding place.

2. Use Policy Sim Names Which Indicate the Rerun Name

The alternative is to let the Rerun and Policy runs start in different years. Then you will need to use different Sim Names for the two Reruns (these Sim Names indicate the starting year) even if the Policy Closures are the same for the two different policies.

We use the same example as above where the LARGE shocks begin in year 2003 and the SMALLer shocks begin in year 2004. If you dont introduce NONE.PSH in year 2003 for the SMALLer shocks, you will need to start the Rerun in year 2003 for the LARGE shocks and in year 2004 for the SMALLer shocks.

Then, in order to keep the results for these 2 applications separate, you will need to distinguish these Reruns by using different Sim Names. For example, you might use

Sim Name R03 for the Rerun starting in 2003 and Sim Name LG3 for the LARGE Policy shocks starting in 2003.

Sim Name R04 for the Rerun starting in 2003 and Sim Name SM4 for the SMALLer Policy shocks starting in 2004.

This is confusing since there is really only one set of Policy Closures in place here. You need to use the different Sim Names R03 and R04 to indicate the different starting years and so that you can swap between applications.

It would have been much simpler to introduce NONE.PSH as part of the SMALLer Policy Shocks (as we suggested in section 1 above). Then the Policy Sim Names are all you would need to distinguish the two applications and to switch between them.

We recommend strategy 1 (introduce NONE.PSH to pretend that all sets of Policy Shocks begin in the same year) whenever you have several different sets of Policy Shocks which start in different years.

URL of this topic: www.copsmodels.com/webhelp/rundynam/hc_multipolstart.htm

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