Economy-wide modeling for analysis of major disruptive events: terrorism, natural disasters and accidents

Principal Investigator: Peter Dixon 

Other Researchers: Adam Rose, James Giesecke, Maureen Rimmer, Glyn Wittwer

The Centre of Policy Studies (CoPS) at Victoria University has developed several versions of the USAGE model of the United States and applied them in collaboration with Adam Rose and other colleagues at CREATE in analyses of various terrorism/security-related events including port closures, disease epidemics and localized infrastructure damage. In 2011, CoPS created a bottom-up regional version of USAGE, called USAGE-R. This model identifies the 50 states of the U.S. as 50 separate economies closely linked by interstate trade and interstate movement of people and capital. The initial version of USAGE-R was comparative static. In 2012-13 the model was given a dynamic dimension similar to that in the national USAGE model. Thus it became capable of tracing out effects of a shock over a number of years. In 2013-14 we extended the regional detail of USAGE-R to the county level and in 2014-15 we went to the Congressional district (CD) level. Most terrorism shocks and other disruptive events occur at a localized level (well below the state level). Thus, for analyzing such events, extending the USAGE-R capability to the county and CD levels is an important enhancement. In 2014-15 we are collaborating with Adam Rose and other colleagues at CREATE on a project for DNDO concerned with the CD-level economic effects of nuclear attacks. As explained in sections 8 to 13 below, our plan in 2015-16 is to enhance the policy value of the county and CD-level USAGE-R model by further developing its quick turn-around capabilities.