# FINGREEN
A macroeconomic model for Finland.
## Purpose and objectives of the research project 

The research is part of the SISU consortium funded by the Strategic Research Council and a research project funded by the Kone Foundation. The aim of the project is to develop a new FINGREEN model for Finland by applying and adapting the system dynamics EUROGREEN model using the Vensim DSS software gfcf. With the FINGREEN model, alternative green transition pathways will be simulated and tested in the Finnish context, and the trade-offs related to these pathways will be compared. In addition, the project seeks to further develop the model so that it can account for biodiversity impacts alongside climate emissions. The project also aims to examine how the model compares to existing models and how its application could create a new paradigm for economic governance. 

## Method 

FINGREEN is an ecological system dynamics model developed for the analysis of the national economy, based on post-Keynesian economic theory and on the principles of input–output and stock–flow consistent modelling. Economic output in the model is determined by aggregate demand, which consists of household consumption, public consumption, investment, and exports. Production, however, is constrained by the availability of capital and labour. The production structure is based on 39 industries and an open input–output model. Households are constructed from individuals who differ in skill (three education levels), gender (female/male), and employment status (unemployed, employed, outside the labour force, retired). Households are grouped according to income quantiles. 

The model development proceeds step by step, starting with data collection. The model is initialized with Excel files that are linked to the Vensim model. These files compile a broad set of empirical data from public databases (around 100 datasets downloaded), mainly from Statistics Finland and Eurostat. Model development includes data integration, parameter estimation, simulations, model calibration based on historical data, and sensitivity analyses. Once developed, the model will be used to simulate and compare alternative policy scenarios. 

## Input data 

Economic and demographic data: population forecasts, migration, time use data, macroeconomic shocks, input–output tables, intermediate input coefficients, breakdown of final demand, foreign trade flows, consumption profiles, price indices, elasticity estimates, investment data, public finance variables, labour productivity, labour market indicators, and the structure of the public sector. 

Environmental data: electricity production, emissions trading systems, temperature trends, forests and land use, biodiversity, ecosystem services, ecological pressures, and sectoral environmental impacts.