Applying the Policy Shocks

When you have a base case, you can apply the Policy shocks. [This is sometimes referred to as carrying out the policy deviation]. For example, you may wish to know how a change in import tariffs in the second and third years of the base case would affect the results. You specify the policy (or deviation) shocks and the closures to use for each year of the policy calculation, and then ask RunDynam to calculate the effects of this policy change. RunDynam recomputes the results for each relevant year, adding the policy shocks to those from the base case, and using the policy closures. As with the base case, RunDynam prepares a spreadsheet showing the percentage changes (from the pre-simulation database) for each year. RunDynam also produces a spreadsheet showing at each year the differences between the policy run and the base case. These show how the changes due to the policy shocks would accumulate through the years of the base case.

You must have completed the relevant year of the base case before you carry out the policy deviation for any year. With some models, you must also rerun the base case using the policy closures before you carry out the policy deviation.

The policy deviation run starts from the first year in which there are extra policy shocks (as specified in the Policy Shocks column on the Closure/Shock page). Thus, for example, if there are no extra policy shocks for the first 3 years, the policy deviation run will start with a run for the fourth year (and the policy closures for the first 3 years are not relevant).

However, the policy deviation run always continues to the end of the base case, even if there are no extra policy shocks in the last few years. This is because the extra policy shocks in the previous years will still be having effects through these last years (via the different starting databases for these years).

When you are ready to carry out the policy simulations, click on the Run Policy button which is always visible near the bottom of the screen.

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

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