PuMA (“Public Policy Model for Austria and other European Countries”) by EcoAustria
PuMA is a computable general equilibrium model (“CGE“). With the model, the economic and fiscal effects of proposed reforms, e.g. in terms of tax policies or labour market regulation, can be simulated ex-ante. PuMa takes country-specific circumstances into account, especially with regard to public finances, social security systems, and the labour market. It is calibrated for Austria and 14 other EU-member states, covering 90 percent of the EU-population.
With a generational accounting model, all public inflows and expenditures are predicted for the future, with primary deficits calculated and discounted. This results in the implicit public debt. By adding the official explicit public debt to that figure, the effective public debt is calculated. In addition to these calculations, the model allows for assessing the effects of various reforms (e.g to health, long-term care, or pensions) on the sustainability of public finances.
In the context of impact assessment, EcoAustria compares the financial expenditures as input variables (e.g. in the areas of education, health, long-term care, or administration) to certain performance measures as output variables, which allows for statistically accounting for structural differences (e.g. demographic differences). By comparing various states and computing benchmark-values, such as the optimal relationship between input and output, efficiency potentials can be calculated.
The EcoAustria-Regional Model is an econometrically estimated gravity model that allows for analysing the development of macroeconomic indicators, e.g. regional GDP or employment, depending on accessibility or other structural characteristics of regions. The accessibility indicator itself depends on the quality of infrastructure and, thus, on infrastructure investments. Consequently, effects of infrastructure investments on the regional GDP, employment and respective fiscal inflows can be estimated. Moreover, a conclusion can be drawn as to what infrastructure investment is the most effective and efficient with respect to its effects on the economy. The model can be further extended to other topics such as broadband accessibility.
EcoAustria-Foreign Trade Model
The EcoAustria-Foreign Trade Model is an econometrically estimated gravity model that analyses the effects of trade regulations (e.g. tariffs or sanctions) in the home and foreign countries. By calculating the effects on trade and the respective effects on GDP, employment, and fiscal inflows, the welfare effects of trade regulations in the home and foreign countries can be determined. In addition, a science-based assessment of the benefits of trade agreements can be provided.