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Content archived on 2024-04-15

DEVELOPMENT OF THE HERMES MODEL FOR IRELAND

Objective

IN CLOSE COOPERATION WITH THE MEMBER STATES, THE COMMISSION UNDERTOOK THE CONSTRUCTION OF THE HERMES MODEL IN 1981. HERMES REPRESENTS THE NEW GENERATION OF ECONOMIC MODELS WITH ENERGY ORIENTATIONS AND SECTORAL DIMENSION. THE ECONOMY OF EVERY COUNTRY IS DESCRIBED IN 9 PRODUCTION SECTORS, 15 PRIVATE CONSUMPTION GOODS, 5 FOREIGN TRADE COMMODITIES. SUPPLY AND DEMAND OF ENERGY ARE REPRESENTED IN A RELATIVELY DETAILED WAY.

THE HERMES MODEL WILL BE UTILIZED ESPECIALLY FOR THE ANALYSIS OF THE INTERFACE BETWEEN ENERGY AND ECONOMY AND FOR THE DETERMINATION OF A COHERENT ECONOMIC FRAMEWORK FOR ENERGY POLICY AND AS AN INSTRUMENT FOR THE ENERGY FORECASTING.

SUCH A MODEL WILL FIND ITS PRINCIPAL APPLICATION AS AN AID TO ENERGY PLANNERS AND POLICY MAKERS IN ILLUSTRATING AND EVALUATING THE IMPACT OF NEW TECHNOLOGIES, ANALYSIS OF EMPLOYMENT PROBLEMS, INVESTMENT PROBLEMS, STRUCTURAL CHANGES...
The original specification of the HERMES economic model can be characterised by 3 crucial numbers:
the number of production blocks;
the number of private consumption categories;
the number of different energy types.
The HERMES-Ireland model consists of the following sections:
production sectors;
behaviour of household, wage determination, consumption, housing investment and labour supply (including migration);
trade volumes and prices examined together with a simple method of handling energy;
manner in which the government fiscal, expenditure and debit financing activities are handled;
energy submodel (not presently incorporated into the complete model) including modelling the interfuel substitution process.
Finally, the functioning of the HERMES-Ireland model as a complete system is described.
- ADJUSTMENT OF THE FOUR SECTORS NATIONAL MODEL IN SIX SECTORS. HERMES VERSION FOR THE PRODUCTION BLOCK AND REESTIMATION OF THIS SECTOR,
- COMPLETION OF THE NATIONAL ACCOUNTS,
- EX-POST SIMULATION ON THE PERIOD 1970-1980,
- ANALYTICAL VARIANTS (1970-1981),
- IMPROVEMENT OF THE MODEL,
- TRANSFER TO THE EEC COMPUTER,
- FORECASTS ON THE PERIOD 1980-1990.

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Coordinator

ECONOMIC AND SOCIAL RESEARCH INSTITUTE
EU contribution
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