Introducing Dynamics to TERM

Abstract

The massive master database of TERM needs to be aggregated before it can be used for any simulation. There is demand for moving to dynamic TERM simulations and rewards from doing so due to additional insights that arise from the influence that a dynamic baseline may have on a policy simulation. This chapter covers a number of issues concerning dynamic modeling with TERM. We start by outlining the motivations for moving from comparative static to dynamic regional modeling. Following that, we provide an overview of how we go about making a version of TERM dynamic. This includes details of how to vary the time intervals within a dynamic model. Next is an explanation of using the master database of TERM to prepare variable aggregation versions of dynamic TERM. The chapter also outlines how recursive dynamic models are run. RunDynam (specialist software) is a very useful tool for the dynamic CGE practitioner.