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International Futures Help System

Stocks and Prices

IFs is fundamentally a general equilibrium model (GEM), but one in which inventory stocks serve as a temporary buffer between demand and supply and prices act to move the system towards equilibrium over time. The production available for final demand (PFD) and imports (MS) serve to increase stocks. Consumption (CS), investment (INVS), and government spending (GS) by sector of origin serve to decrease stocks, as do exports (XS).


Prices (PRI) in IFs are quite important in the agricultural and energy models where they directly affect demand and supply through elasticities. In the economic model they have lesser impact, primarily through trade and secondarily through price-responsiveness of sectoral consumption. In addition, prices implicitly affect investment by destination, although for reasons of computational sequence IFs actually uses stock levels directly to redirect investment by sector. Prices in IFs are relative prices and are indices around initial base values of "1." They are based on stock levels and a second order stock change term.




The stock base (STBASE) is the sum of gross production (important to large producers in an economic sector, whether they consume domestically or export) and initial imports scaled up by potential GDP growth (important to large importers, when domestic production is small). The desired level of stocks as a portion of the base ( dstl ) is exogenous.