ADAM - a model of the Danish economy

The publication describes ADAM (Annual Danish Aggregate Model), which is an economic model of the Danish economy.

ADAM represents the traditional synthesis between Keynesian and neo-classical theory. This means that production and employment is determined by demand in the short term and by supply in the long term where prices are flexible.

In the long term, ADAM functions like a growth model. ADAM is an empirical model, and the majority of its behavioural equations are estimated on national accounts data.

The purpose of ADAM is to have a tool for analysis of the Danish economy. The main users of the model are the economic ministries, but ADAM is also used by a number of organisations who subscribe to the model and its data bank.

ADAM is mainly used to assess the impact of economic policy interventions, but the model is also used for economic projections, both in the short and in the long term.

The publication deals with the version of ADAM introduced in 2011. With this model version, ADAM has been made more manageable by reducing the number of industries from 19 to 12 and by splitting the demand and imports into fewer variables.

The publication is written for students with a bachelor in economics, so that basic economic and econometric concepts are assumed known, but it is not assumed that the reader is familiar with ADAM or similar models. The emphasis is on interpreting the overall model properties which are illuminated with a series of model calculations.