Modelling and forecasting

Department for Work and Pensions - Head of Model Development
Ashwin Kumar headed the Model Development Unit at the Department for Work and Pensions (DWP) where he developed economic models used to analyse tax and benefit policy, expenditure forecasting, pensions and poverty.

Pensions
His principal achievement was developing from scratch Pensim2, the UK government's world-leading model to predict pensioner incomes over the next 50 years.  Delivered for use by the Pensions Commission in 2004, the model was audited by the Institute for Fiscal Studies which gave it a ‘very positive’ assessment (see Emmerson, Reed and Shephard, An Assessment of Pensim2, Institute of Fiscal Studies, WP0421).

Tax and benefits
Ashwin was responsible for the DWP's Policy Simulation Model, used to estimate the expenditure and policy effects of all tax and benefits policy.  The model was the department's tool for estimating who was likely to be affected by tax and benefit changes, and by how much.  It was used during preparations for each year's budget to predict the likely impact of policies on child poverty and how much the changes were likely to cost or save. 

Liverpool Economics has recently carried out work for the Institute of Public Policy Research on their model for estimating the effects of tax and benefit policies.

Forecasting
Under his leadership, the unit delivered new models for forecasting benefit expenditure and a new model to forecast future trends in lone parenthood and fertility.

Microsimulation
He delivered Genesis, a development environment for microsimulation models that has dramatically reduced the cost of delivering the most complex models and increased signficantly the UK government's capability to use economic modelling to analyse policy.

He also developed a project management framework for the development of economic models, which was used to increase the professionalism of the unit's approach to project management, customer consultation and quality assurance.

Global poverty
Whilst working for Gordon Brown, Ashwin developed a model to project global poverty using historic country-specific growth and poverty data from the World Bank to calculate growth-to-poverty conversion rates.  These were combined with short-term growth projections from the OECD, and alternative long-term growth projections from forecasters, to produce country-specific and global poverty projections.

"The only function of economic forecasting is to make astrology look respectable."

John Kenneth Galbraith