Tools for Open Source, Subnational CGE Modeling with an Illustrative Analysis of Carbon Leakage.

This paper introduces the Wisconsin National Data Consortium (WiNDC) framework for producing self-consistent accounts based on publicly available datasets that can be used in sub-national economic equilibrium analysis in the United States. We describe the process used to generate regional social accounting matrices and a calibrated static multi-regional, multi-sectoral computable general equilibrium model conformal with the constructed dataset. As illustration, we show how the core model can be applied for the analysis of energy-environment issues. We use an energy-economy extension of the core model to assess the effectiveness of several state level greenhouse gas mitigation proposals. Sub-national abatement measures result in carbon leakage - mandated reductions in controlled areas may be vitiated by increased emissions in uncontrolled jurisdictions. Using a WiNDC-based model, we calculate leakage rates and show how these depend on the underlying trade model. Our calculations demonstrate the importance of both data and modeling assumptions for the simulation of policy experiments.

Projecting long term medical spending growth.

We present a dynamic general equilibrium model of the U.S. economy and the medical sector in which the adoption of new medical treatments is endogenous and the demand for medical services is conditional on the state of technology. We use this model to prepare 75-year medical spending forecasts and a projection of the Medicare actuarial balance, and we compare our results to those obtained from a method that has been used by government actuaries. Our baseline forecast predicts slower health spending growth in the long run and a lower Medicare actuarial deficit relative to the previous projection methodology.