MDM-E3: UK Multisectoral Dynamic Model - E3
MDM-E3, the Multisectoral Dynamic Model of the UK economy, is maintained and developed by CE as a framework for generating forecasts and alternative scenarios, analysing changes in economic structure and assessing energy-environment-economy (E3) issues and other policies. MDM-E3 provides a one-model approach in which the detailed industry and regional analysis is consistent with the macroeconomic analysis: in MDM-E3, the key indicators are modelled separately for each industry sector, and for each region, yielding the results for the UK as a whole. MDM-E3 is one of a family of models which share the same framework, general design, methodology and supporting software; the scope of the E3ME model is European; that of E3MG is global.
To analyse structure, the E3 models disaggregate industries, commodities, and household and government expenditures, as well as foreign trade and investment, and the models incorporate an input-output framework to identify the inter-relationships between industry sectors. The E3 models combine the features of an annual short- and medium-term sectoral model estimated by formal econometric methods with the detail and structure of input-output models, providing analysis of the movement of the long-term outcomes for key E3 indicators in response to economic developments and policy changes. The models are essentially dynamic simulation models estimated by econometric methods.
In summary MDM-E3 provides:
- annual comprehensive forecasts to the year 2020:
- for industry output, prices, exports, imports and employment at a 41-industry level; for household expenditure by 51 categories; for investment by 27 investing sectors
- for the nine Government Office Regions, Wales, Scotland and Northern
Ireland
- full macro top-down and industrial bottom-up simulation analysis of the economy, allowing industrial factors to influence the macro picture
- an in-depth treatment of changes in the input-output structure of the economy over the forecast period to incorporate the effects of technological change, relative price movements and changes in the composition of each industry's output
- Scenario analysis, to inform the investigation of alternative economic futures and the analysis of policy
For a more detailed description of the MDM-E3 model see the following paper.
For further information, email:
Rachel Beaven
Director
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