The macroeconomic model, DREAM, is developed to analyse the long-term challenges that the welfare state faces. This is achieved by detailed modelling of the institutions that affect the government’s revenue and expenditure. In doing so, the model can also be utilised to evaluate the effect of economic policies.
The so called DREAM-model-system consists of projections of population, education and labor supply (our demographic projections), which feed into the computable general equilibrium dynamic macroeconomic model (the DREAM model) which is calibrated to the Danish economy. These different components allow the DREAM group to perform economic analysis, with a particular emphasis on investigating the public finance sustainability of economic policy.
DREAM is a computable general equilibrium dynamic macroeconomic model which is calibrated to the Danish economy.