Models overview

Overview of the existing advanced macro-economic models in the MONROE modelling toolkit

Title Main Features R&I module Geographical coverage
DSGE A multi-country, multi-sector annual DSGE model with endogenous growth.

Based on the work of Holden (2016; 2017), with process innovation driving long-run growth and product innovation absorbing the scale effect. Slow diffusion up across countries is driven by the necessity of human capital accumulation to take advantage of new technologies.

6 regions, plus the rest of the world. The regions are: 1) the US, 2) the UK, 3) Germany, 4) France, 5) (most of) the rest of EU (REU, including Belgium, Denmark, Finland, Italy, Netherlands, Portugal, Spain, Sweden), 6) the rest of model area (RMA, including Australia, Canada, Japan, Norway, Switzerland).
EU-EMS NEG model, recursive-dynamic

Endogenous productivity, catch-up process as a function of R&I and human capital stocks, sectoral dimension of productivity

NUTS2 regions of EU28
E3ME Macro-econometric model

Measures of endogenous technological progress, technology diffusion, technological spillovers

World-wide, all EU28 countries separately
PACE CGE model, recursive-dynamic

Modelling of product and process innovation using monopolistic competition

World-wide, all EU28 countries separately
GEM-E3-RD CGE model, recursive-dynamic

Endogenous development of human capital, technological spillovers, semi-endogenous productivity

World-wide, all EU28 countries separately

Monroe project versions of the macro-economic models

Type of policy/action Simulation channel EU-EMS PACE E3ME GEME3 DSGE
Public (i.e. Horizon 2020 , European Structural and Investment Funds) and private RTD investments Country/region-level RTD stock. Public budget for R&D, stock of knowledge, private decision on R&D driven by relative prices and supporting instruments (subsidies, tax exemptions) N Y Y Y Y
Public and private investments in human capital Country/region-level human capital stock Y Y Y Y Y
Private RTD investments Sector-specific RTD stock Y Y N Y Y
Private investments into human capital Sector-specific human capital stock N Y N Y Y
RTD project grants and loans Financing scheme and sources. Speed of arrival of new innovations Y N N N N
Sector-specific RTD support schemes Sector-specific taxes and subsidies Y Y Y Y Y
RTD tax measures, subsidies for new technologies Commodity-specific taxes and subsidies Y Y Y Y N
Sector-specific RTD support schemes Sector-specific TFP, sector specific subsidies/grants/tax exemptions Y Y Y Y Y
RTD grants, infrastructure, centres of exellence etc. Public sector expenditures Y N Y N N
RTD tax measures, subsidies for new technologies, subsidies for RTD personell Uptake speed of new technologies/products (capital vintages) N Y N Y Y
Technology diffusion schemes, selective innovation support schemes RTD sector support schemes such as subsidies Y Y N Y N
Linkage policies such as collaborative programmes, cluster policies etc. Level/degree of knowledge spillover effects between sectors Y Y N Y N
RTD tax measures, loans and warranties, RTD support schemes Firms decisions to invest in RTD (costs versus benefits) N Y Y Y N
Support for life-long learning, education schemes and financing of advanced degrees Individuals decisions to invest in human capital (costs versus benefits) N Y N Y Y
Different types of RTD policies Number of variaties of available capital goods Y Y N Y N
Open access to innovation Increase spillovers through quicker access to patents N Y N Y  
Open science Increase spillovers through free access to scientific journals N N N N N
Open to the world Open access top innovation and science referes to the increase of spillovers within EU. This action referes in increasing spillovers from and to non-EU countries N Y N Y N
R&D financing and public budget consolidation Alternative public budget portfolios N Y N Y N
Firms personell training Endogenous firm decision to upgrade its human capital. Public subsidy to firms for training their personnel. N N Y Y N
TREATMENT OF TFP IN THE MODELS Exogenous sector-specific TFP/labour productivity N N N N N
TREATMENT OF TFP IN THE MODELS Semi-endogenous sector-specific TFP/labour productivity N Y Y Y N
TREATMENT OF TFP IN THE MODELS Fully endogenous sector-specific TFP/labour productivity Y N N N Y