Policy closures

For each year, these are the closures to be used for the policy deviation run.

The policy closures are often different to the base case closures since variables which were endogenous in the base case closures may need to be exogenous in the policy closures so that they can be shocked (or held constant). Often in the base case, some macro expenditure variables, some commodity exports, world prices, technology and tariff changes can be predicted using expert knowledge from outside the model. These variables are exogenous and shocked in the base case. In the policy changes some of these variables are endogenous so that they can be affected by the policy shocks.

The difference between the forecast closure and the policy closure in the MONASH model is discussed in Chapter 5 of the MONASH Model book by Peter Dixon and Maureen Rimmer.

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

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