Macroeconomic Modelling

In several of its economic projects FEPS uses two state of the art macroeconomic models: the Cambridge Alphametrics Model (CAM) and the Heimdal Model.

CAM Model

Initiated in 2005, the CAM model is currently supported by FEPS and the Centre for Development Policy and Research (CDPR). It was supported formerly by the International Poverty Centre (IPC) in Brasilia, an institution sponsored jointly by the United Nations Development Programme and the Brazilian Government. The rudiments of the model were developed by members of the Cambridge Economic Policy Group in the 1980s at the University of Cambridge. Drawing on that tradition, Alphametrics Ltd. of Thailand is further developing the model. The director of Alphametrics, Francis Cripps, was a member of the Cambridge group and an originator of the model.

The model’s data cover the period from 1970 to the year for which there are the most currently available data. Calibrated to simulate long-term historical trends, the model is most suitable for making projections 10-15 years into the future.

Started with income, population, energy and trade, the model has been extended to include fiscal, monetary and financial variables, including a more comprehensive account of the balance of payments. Researchers plan to add demographic factors, employment, the distribution of income, and poverty.

The addition of distributional variables will help researchers to identify the probable impact of global economic dynamics on human well-being. Policymakers will also be better able to identify appropriate policy responses.

Read more about CAM Model


The international macroeconomic model HEIMDAL was developed in ECLM in the nineties. Today the Foundation for European Progressive Studies (FEPS) is a co-owner of the macroeconomic model HEIMDAL, and the model is developed and maintained in a joined cooperation between ECLM and FEPS, and it is used to illustrate the impact of policy changes in the European economy.

HEIMDAL1 (Historically Estimated International Model of the Danish Labour movement) is an interna- tional model developed by The Economic Council of the Labour Movement (ECLM) in Copenhagen, Denmark. The HEIMDAL model focuses on the world economy from a European perspective, de- scribes the European economies both on a country level as well on an aggregated EU level. Besides the European countries the two large countries the United States and Japan are modeled.

HEIMDAL describes the economy in 15 OECD countries, including 13 European economies: Germany, France, UK, Italy, Spain, Poland, Czech Republic, the Netherlands, Belgium, Finland, Norway, Sweden and Denmark. In addition, the model also accounts for the world trade on a country based level.

Each country is described by its own country model. The relations of each country model are estimat- ed on annual data, which generally covers the period 1960-2010. The model structure and the esti- mated relations are based on the methods and theories traditionally used in the macroeconomic simu- lation models. The individual country models are based on a Keynesian theoretical background in the sense that production and employment are determined by aggregate demand in the short run. In the long run prices and wages will react to changes in unemployment and capacity utilization, e.g. a fall in unemployment will increase wages and prices which in turn affect competitiveness, lowering export and increasing import which lowers the aggregate demand. 

Data for estimation and simulation of HEIMDAL originates primarily from the OECD Outlook database whichis publishedevery six months along withOECD's economic forecasts. Since obtainment of international data - both in terms of historical data and forecasted data - is very resource intensive, it has generally been a guiding principle not to base HEIMDAL on data that does not exist in or can be derived from the OECD's Outlook database.

Read more about HEIMDAL model

Publications developed using CAM and HEIMDAL

In English


Saving the Eurozone: modeling an alternative vision of Europe. Policy Brief. Michell, J. (2015)

Addressing the pressing need to reduce Global and European Imbalances. Policy Brief. Cozzi, G.; McKinley, T. (2015)

Can Conventional Macroeconomic Policies Prevent Persistent Stagnation in the European Union? Policy Brief n.5 Cozzi, G.; McKinley, T.; Michell J. (2014) 

How can the EU Federal Government spearhead an employment-led recovery? Bargawi, H. Cozzi, G. McKinle, T. Michell, J. Economic Policy Brief No.1 2013

Investment-led growth: a solution to the European crisis. Cozzi, G. Griffith-Jones, S. 2014

Employment-focused recovery for Europe: an alternative to austerity. Cozzi, G. Michell, J. 2014


Progressive educational policies can keep unemployment low – the Danish case. Dahl, S., Bjørsted, E., Nissen, T. Policy Viewpoint 2015

Active labor market policies and low inequality go hand in hand. Dahl, S., Bjørsted, E., Nissen, T. Policy Viewpoint 2015

Why are the nordic countries doing so well? The case of Denmark and Sweden. Dahl, S., Bjørsted, E. Policy Brief 2015

Is the German Labor market really performing that well?  Overvad, A.C. Dahl, S. Economic Policy Viewpoint 2015

Imbalances in the European UnionDahl, S. Economic Policy Brief n1 2015

A gendered investment plan, Hansen, S. Andersen, L. Economic Policy Brief No.2 2014

The way out of the crisis: An alternative to austerity Andersen, L, Bjørsted, E.  Policy Brief No. 3, September 2013

ECLM forecast evaluation during the crisis. September 2012

Gloomier outlook for Europe, Hansen, S. September 2012

Long term unemployment is still rising: 10½ million are now long term unemployed Bjørsted, E. August 2012.

Shifting Europe from austerity to growth: a proposed investment programme for 2012-2015 Griffith-Jones, S. - Kollatz-Ahnen, M. - Andersen, L. - Hansen, S. 

For a full list of publications in Danish from ECLM: