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This report documents progress made on continued developments of the National Infrastructure Simulation and Analysis Center (NISAC) Computable General Equilibrium Model (NCGEM), developed in fiscal year 2012. In fiscal year 2013, NISAC the treatment of the labor market and tests performed with the model to examine the properties of the solutions computed by the model. To examine these, developers conducted a series of 20 simulations for 20 U.S. States. Each of these simulations compared an economic baseline simulation with an alternative simulation that assumed a 20-percent reduction in overall factor productivity in the manufacturing industries of each State. Differences in the simulation results between the baseline and alternative simulations capture the economic impact of the reduction in factor productivity. While not every State is affected in precisely the same way, the reduction in manufacturing industry productivity negatively affects the manufacturing industries in each State to an extent proportional to the reduction in overall factor productivity. Moreover, overall economic activity decreases when manufacturing sector productivity is reduced. Developers ran two additional simulations: (1) a version of the model for the State of Michigan, with manufacturing divided into two sub-industries (automobile and other vehicle manufacturing as one sub-industry and the rest ofmore » manufacturing as the other subindustry); and (2) a version of the model for the United States, divided into 30 industries. NISAC conducted these simulations to illustrate the flexibility of industry definitions in NCGEM and to examine the simulation properties of in more detail.« less |
