Short description:

COFORCE (copper forecasting Chile) is a forecasting and simulation model which can be used to analyse the effects of structural changes in the Chilean economy. It is a macroeconomic input-output model which is distinguished by its empirical specification and is constructed around the interrelationships between individual industrial sectors. The model has been developed in co-operation with the Chilean partners from the Universidad Adolfo Ibáñez, Viña del Mar, Chile, during the research project “Development of Sustainable Mining Strategies in Chile with a Regionalized National Model (FKZ: 01DN16030)” which was funded by the Federal Ministry of Education and Research (BMBF).

Model description:

Because the quality of the data used is vital, it uses only official data sources, in particular national accounts and input-output tables, and other data from domestic and international public organisations.

COFORCE’s strength is its ability to analyse complex socioeconomic and economic structures including their dependencies. The input-output relationship also allows the identification of direct and indirect effects and cause-effect relationships. This enables end-to-end modelling of interdependencies between individual industrial sectors, as well as an explanation of macroeconomic relationships which treats an economy as the sum of its individual parts.

An important feature of the COFORCE model is the inclusion of detailed trade data through the integration of the global trade model TINFORGE. The specifications for export demand thus take into account not just the economic power of Chile’s trading partners and their proportion of trade, but also distinguish between tradable goods categories.

TINFORGE is extended to world copper trade, copper production and copper consumption. The model incorporates data for a total of 154 countries and the rest of world and 33 goods categories. This detailed treatment of Chilean export demand enables in-depth analysis of the Chilean economy and especially the copper mining industry against the backdrop of globalisation.