Laserfiche WebLink
Simulation and projection of economic activities (production, consumption, and trade) are central to the <br />model; Cobb -Douglass functions determine the balance of capital, and labor levels; and the model <br />seeks equilibrium between industries' labor demand, wage levels, and labor supply. If industries' labor <br />demand intensifies (or slackens), then wages and labor supply adjust up (or down) via economic <br />migration. Thus, economic competitiveness and labor demand are the major determinants of migration <br />in the REMI PI model. <br />A more detailed description can be found in the model documentation: <br />Regional Economic Models Inc. (2013), REMI Pl+ Model Equations, online at <br />www.remi.com/download/documentation/pi+/pi+ version 1.5/P1+ v1.5 Model Equations.pdf <br />Our Minnesota implementation of the model has two home regions: the Twin Cities metro is one; the <br />remaining 80 counties are a second region; the rest of the nation and the world are additional linked <br />economies. Model updates delivered by Regional Economic Models Inc. in 2011, 2012 and 2013 <br />assess the Twin Cities metro having factor cost advantages, resource advantages, and good workforce <br />availability across a complete range of occupations. These characteristics inform a forecast of above - <br />average growth in coming decades. <br />Methodology of Profamy model. <br />Metropolitan Council has also implemented Profamy, a separate demographic model for projecting <br />household counts by demographic cohort, using extended cohort -component techniques to represent <br />household change dynamics. <br />The model groups all population members by age, race and gender, and projects forward distributions <br />of life cycle states based on demographic schedule probabilities. These schedules cover fertility rates, <br />survival rates, leave home rates, inter -regional migration, household formation, and <br />cohabit/marriage/separation rates. Summarization of probabilities provides a comprehensive time - <br />series of population and households characteristics. <br />A more detailed description is available from the model developers. See: <br />Yi Zeng, et al. (2010), Household and population projections at sub -national levels: An extended <br />cohort -component approach, online at http://paa2010.princeton.edu/papers/101958 <br />In 2012, Metropolitan Council staff worked with HCF Consulting to update the model with region - <br />specific 2010 base year data, region -specific fertility rates, and migration rates by age, race and <br />gender. The migration rates table is a compilation of migration results from the REMI PI model. <br />Profamy was tested by Council staff and its projections compared with the REMI PI forecast. Given the <br />same demographic schedules, and the exogenously-provided migration rates, Profamy can produce a <br />30-year-horizon population projection that is within 1 percent of the REMI PI forecast. <br />Metropolitan Council staff are using REMI PI for economic, employment and population forecasts. <br />Profamy is used as a follow-on process, to parse the REMI PI population projections into households <br />by household type. HCF Consulting has provided programming that allows the model user to enforce <br />consistency with the time -series of population projections received from the REMI PI modeling. <br />Modifications to the as -delivered REMI PI model, <br />In the implementation of REMI PI, Council staff modify some settings and data inputs to the model. <br />First, the national forecast in the Council's model is controlled to match nation -level GDP projections <br />and industry employment projections drawn from Global Insight's 30-year Trend forecast; this is the <br />same forecast used by the Minnesota State Economist as a baseline for long-term, national economic <br />Page 3 <br />