Overview of the NEMESIS Model ERASME

I.1 Introduction The Nemesis model runs under the IODE software Estimation are made mainly using TSP A set of Visual Basic programs had been developed allowing easy reporting facilities ( tables and graphs, chosen by model’s users ) Overview of the NEMESIS Model

I.2 Geographical Coverage - EU-27 countries less Cyprus and Bulgaria, plus Norway - One model per country Twenty-six European Countries Overview of the NEMESIS Model

I.2 Geographical Coverage 1 Western Europe (not incl. EU-27) 2 Eastern Europe (not incl. EU-27) 3 NAFTA 4 Japan 5 Rest of OECD 6 Former USSR 7 China 8 OPEC 9 NICs 10 Rest of World Ten World Areas (exogenous, only for external trade) : Overview of the NEMESIS Model

I.3 Economic Coverage : Sectors 1 Agriculture 2 Forestry 3 Fisheries 4 Coal and Coke 5 Oil & Gas Extraction 6 Gas Distribution 7 Refined Oil 8 Electricity 9 Water Supply 10 Ferr & non Ferrous Metals 11 Non Metallic Min Products 12 Chemicals 13 Metal Products 14 Agr & Indus Machines 15 Office machines 16 Electrical Goods 17 transport Equipment 18 Food, Drink & Tobacco 19 Tex., Cloth & Footw. 20 Paper & Printing Products 21 Rubber & Plastic 22 Other Manufactures 23 Construction 24 Distribution 25 Lodging & Catering 26 Inland Transports 27 Sea & Air Transport 28 Other Transports 29 Communication 30 Bank, Finance & Insurance 31 Other Market Services 32 Non Market Services Thirty-two Production Sectors Overview of the NEMESIS Model

I.3 Economic Coverage : Consumption 1 Food 2 Drink 3 Tobacco 4 Clothing and Footwear 5 Gross Rent & Water 6 Electricity 7 Gas 8 Liquid Fuels 9 Other Fuels 10 Furniture, etc. 11 Household Text., etc. 12 Major Appliances 13 Hardware 14 Household Operation 15 Domestic Services 16 Medical Care, etc. 17 Cars, etc. 18 Petrol, etc. 19 Rail Transport 20 Buses & Coaches 21 Air Transport 22 Other Transport 23 Communication 24 Equipment, etc. 25 Entertainment, etc. 26 Exp Rest and Hotel 27 Misc. Good & Services Twenty Seven Consumption Categories Overview of the NEMESIS Model

II.1 Supply Side Nested CES Production Function Overview of the NEMESIS Model

II.1 Supply Side It integrates an R&D based Endogenous growth Module – Assessment for the 3% R&D effort – Assessment for the 7 Framework program Overview of the NEMESIS Model

II.2 Consumption function: allocation structure for durable goods Overview of the NEMESIS Model

II.2 Consumption Functions: allocation structure for non-durable goods Overview of the NEMESIS Model

II.3 Interdependencies Overview of the NEMESIS Model

II.3 Interdependencies For short/medium term simulations, these matrices are considered to be fixed coefficient For long term simulations, they are considered to be flexible (except for consumption and intermediate energy demands). Overview of the NEMESIS Model

II.3 Interdependencies: R&D Spillovers Rent Spillovers (input related) – These spillovers are input related thus in the model: Energy Convert matrices Intermediate Consumption Convert matrices Investment Convert matrices Knowledge Spillovers (transmission of ideas) – Technology flows Matrices Data: Patent Application to the EPO by IPC Class (Source: Eurostat) Use the OECD Concordance Table (previously Yale Concordance table) for transforming IPC based patent data into sector (ISIC Rev. 3) patent count (Johnson [2002]) Overview of the NEMESIS Model

II.4 Taxes and subsidies * Direct taxes - Taxes on income - Other current taxes * Taxes on production and imports - Taxes on products : VAT, excise duties, other * Value added type taxes * Taxes and duties on imports excl. VAT *Taxes on product, excl. VAT & import duties -excise duties -other taxes on products – Other taxes on production Social contributions * Imputed social contributions * Actual social contributions - By employers - By employees - By self- and non-employed persons Capital taxes Investment grants Subsidies on production Subsidies on products Overview of the NEMESIS Model

II.5 Detailed agent account Total Economy Financial corporation Non Financial corporation General Government Households