The first version of DREAM was made in 1997, and since then the model has been continually refined and expanded - a process which is still continuing. The latest previous full documentation of DREAM appeared in 1998. Since then, several important extensions and other changes to the model have taken place. The aim of the present documentation is to provide an up-to-date description of the DREAM model. Among the most important changes since 1998 are:

  1. Introduction of imperfect competition in goods markets,
  2. Introduction of trade union behaviour on the labour market,
  3. Introduction of housing as a separate consumption (and capital) good,
  4. Introduction of funded pensions arrangements (labour-market pensions funds as well as individual pensions arrangements),
  5. A considerably extended modelling of the government sector, following the classification of the national accounts in greater detail,
  6. Subdivision of the population into various ethnic groups (immigrants/descendants of im- migrants/remaining population),
  7. A change of the run-time intervals of the model from 5-year to 1-year periods.

Some of these changes have been described in various single-standing papers, whereas others have not been publicly documented until now. The present study covers all these features as well as other model changes since 1998 and provides a new listing of DREAM s data sources, a presentation of DREAM's present baseline projection of the Danish economy and a collection of simulation results.

One of the particular objectives is to present and explain every single equation in the main DREAM model to make the documentation useful for the actual users who work hands-on with the model. As the model is very complex, a thorough reading-through of all chapters may not be the most suitable way of acquiring a sound over-all knowledge of the model. For readers who are interested in getting this, it is recommended to read chapter 2, which presents a non-technical overview of the main characteristics of DREAM, and chapter 9 which presents a number of simulation experiments. Chapters 3-7 presents the details of the model. Chapter 8 describes the calibration process and the background sources for the data and determination of individual parameters which are employed in DREAM.

It is recommended to consult the appendix on principles for naming variables when reading the main chapters of the documentation.