Ruralia Institute

Ruralia in brief Ruralia magazine, (mainly in finnish) Contact information

Ruralia Institute
Lönnrotinkatu 7
Tel. +358 294 1911

Ruralia Institute
Kampusranta 9
Tel. +358 294 1911

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Finland is one of the leading CGE modeling countries

Mark Horridge believes that CGE modeling generates useful results.

Numbers fill the room when Australian CGE modeler, Professor Mark Horridge, presents his extensive slideshow in the seminar that was held in Seinäjoki, Finland. Horridge was invited to tell about wide Australian experiences of general equilibrium modeling. In the beginning of his presentation he emphasized the Finnish know-how in this field. 

    - Finland is one of the world’s top countries in CGE modeling. Relatively to country’s population, there is more CGE modelers in Finland than in USA, says Horridge.

CGE comes from words Computable General Equilibrium. According to Horridge, the meaning of CGE modeling is to provide useful information into social conversation and to support decision making.

    - With the models it is possible to see what are the economic benefits of each project, states the Professor.

In Australia, the benefits of the modeling have been well recognized, therefore many decision makers have learned this analytical method.

    - With modeling it can be also found out that, for example, tourism could, in some cases, have a negative impact on a regional economy even though people could think otherwise, Horridge reveals. 


City around the mine

In the kangaroo country mining boom is continuing and as new mines are arising, this requires new calculations from Horridge and his team.

    - Earlier, people though in Australia that they have to build a city around the mine. This way of thinking have now been stood down, mentions Horridge who works in University of Victoria in Melbourne.

CGE modelers from six different countries participated in the seminar in Seinäjoki on 16th and 17th of March at Frami venue. The seminar was organized by University of Helsinki, Ruralia Institute. Speakers in the international seminar in addition to Horridge, were Professor Robert Wright from Great Britain, Professor Katarzyna Zawalinska from Poland, doctors Tamás Sebestyén from Hungary (online), Örjan Furtenback from Sweden and Juha Honkatukia from Finland. University Consortium of Seinäjoki has co-financed the event. 


Only few CGE modelers in Finland

Even though there are relatively more CGE specialists in Finland than in USA, there are still only few modelers in Finland. There have been some doctoral thesis about the topic: Ruralia Institute’s professor Hannu Törmä’s thesis from year 1987 was the first one.

CGE models are the best way to evaluate investment’s short and long term regional economic effects, according to Professor Hannu Törmä. The basic principle in the models is that in regional economy “everything effects everything”.

    - CGE model developed in Ruralia Institute (RegFin) describes the correlations in regional economy inclusively and because of the models’ flexibility it is suitable for many different studies. We have made already over 50 RegFin case studies, says Törmä.

Often it is about infrastructure projects like mines, roads, railroads and tunnels – how they affect regions’ employment and economy. Also regional and tax policy changes, possibilities of bioeconomy, including local and organic food, can be evaluated with CGE models. Our CGE modeling team have evaluated also unusual topics like rhythm music, fish and crayfish industry and special health care.

The seminar series of modeling continues in August in ERSA (European Regional Science Association) congress in Lisbon where three CGE sessions will be organized. Ruralia’s topic will be; Regional economic impacts of local food in Finland: A CGE evaluation.