CGE modelling

CGE modelling is the leading analytical approach for assessing the impacts of major projects and policy changes on the economy. It is the preferred framework of most central government agencies and it is the only framework capable of reliably capturing the full suite of impacts that flow from major changes in the economy.

Deloitte Access Economics is a leading provider of CGE modelling. We bring a brand and track record underpinned by independence and authority, a model with unparalleled capability, and a team of the highest calibre.

Why use CGE modelling?

CGE modelling provides the most reliable and respected basis of determining the net impact of changes affecting the economy. These changes may be external shocks, like a slowdown in global demand for a given commodity or service; they may be policy changes, like the introduction of a carbon tax; or they may be a new project or investment, like a road or sporting stadium.

It is a framework that supports bespoke scenario analysis in a single, robust, integrated economic environment, enabling an assessment of the net impact on key macroeconomic indicators such as GDP and employment, and key sectoral measures like industry output. CGE modelling is the preferred framework for gauging the impacts of large, multi-year projects throughout the economy, and is widely recognised by all levels of government in Australia. But like all modelling, there is a right and a wrong way to do CGE analysis. Deloitte Access Economics uses approaches to CGE modelling that have been honed through years of experience, and in collaboration with government economic agencies. We bring a trusted and proven approach to this complex area of modelling.

Our model

Our in-house CGE model, known as DAE-RGEM, is unrivalled in both its capability and in the breadth of its applicability to policies, projects and wider scenario analysis. DAE-RGEM is one of the only models in the world that can model the impact of a scenario on individual Australian regions (such as individual cities or local government areas), linked to each other, and to other individual countries (e.g. China) in the global trading system

DAE-RGEM encompasses all economic activity – including production, consumption, employment, taxes and trade – and can run scenarios through time involving multiple regions, industries and commodities. It is a model that can be customised for specific purposes, whether that be an unorthodox industry definition, a unique regional perspective or multi-faceted policy or project evaluation.

Our team

Our CGE modelling team includes specialist modellers across Deloitte Access Economics’ national network with over 50 years combined experience. This experience spans key government agencies like Treasury, academic posts, and private sector consulting. The team is led nationally by Cedric Hodges under the technical oversight of Hom Pant. Cedric worked in Commonwealth Treasury for over five years where he helped develop their in-house CGE model and Hom is one of the pre-eminent CGE modellers in the world with over 25 years’ experience.

Our experience has seen us work on leading issues in all industry sectors and across all policy domains, with especially rich expertise in the areas of:

• Trade
• Environment
• Tourism
• Taxation
• Industry policy.