KREI-ASMO(Korea Rural Economic Institute - Agricultural Simulation Model) was developed by the Korea Rural Economic Institute in 1995, and has been used for mid- and long-term outlook as well as to analyze external shocks or various alternative policies for the Korean agricultural sector. The model is a partial equilibrium model that adopts a structural/recursive simulation method.
KREI-ASMO includes five sub-models; 1) sub-model for forecasting of macro-economic variables, 2) input price sub-model, 3) grain and fruits and vegetable sub-model, 4) livestock sub-model, and 5) closing sub-model for the Korean agriculture sector.
This 2-years research project aims to version-up the KREI-ASMO, and this report is the first year midterm paper. Main features of this study are; 1) updating the database, 2) replacing the supply and demand estimation for 18 large commodity groups into 53 specific commodities and groups, 3) introducing international trade sub-model for rice, and 4) finding the equilibrium prices through simultaneous equilibrium of supply and demand instead of recursive method.
In the first year, database was updated, supply and demand equations for the specified commodities were estimated, and some macro agricultural equations such as farm population, farm employment, farming vs. non-farm income, input price indices were re-estimated.