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NiGEM Global Scenario
Economic
Current
active
International propagation model suited to multi-country shock analysis.
Horizon 2025–2035
Geography Multi-country (50+ country models, bilateral trade flows)
Resolution Country + sector via trade-flow decomposition
Projection years 2025, 2027, 2029, 2031, 2033, 2035
Cross-border spillovers
Commodity prices
Exchange rate dynamics
Capital flows
Trade fragmentation
Supply chain risk
Sovereign balance sheets
Methodology
The National Institute Global Econometric Model (NiGEM) is a multi-country model maintained by NIESR, designed for international spillover analysis and stress testing across 50+ country models. It explicitly models cross-border trade flows, commodity price transmission, exchange rate dynamics, and sovereign balance sheet linkages. CE uses NiGEM as the primary cross-border fragmentation tool — under the trade fragmentation scenario, it captures how supply chain disruption, commodity repricing, and capital flow reversals propagate differently across industries with varying export/import intensity. The model is particularly valuable for scenarios where policy incoherence creates divergent competitive regimes across major economies.
Key Mechanisms
- Multi-country linkages: bilateral trade flows, commodity prices, and financial conditions propagate shocks across 50+ country models simultaneously
- Exchange rate dynamics: floating exchange rates adjust in response to policy divergence, creating competitiveness effects for trade-exposed sectors
- Commodity price transmission: oil, gas, food, and metals prices are endogenous — a supply shock in one region affects all importing countries
- Capital flow reversal: sudden stops in cross-border capital flows affect financing costs differently in emerging vs. developed markets
- Trade fragmentation scenario: tariff escalation, supply chain reshoring, and market access restrictions are explicitly modelled as policy interventions
Best For
cross-country spillovers, stress testing, and trade fragmentation
Strengths
- Best-in-class for cross-border spillovers — uniquely captures how a policy shock in one country propagates to others through trade and finance
- Commodity price endogeneity: energy, food, and materials prices respond to supply and demand dynamics, not just held constant
- Explicit trade fragmentation stress scenario framework aligned with NGFS and FSB climate stress testing protocols
Limitations
- Less detailed on domestic financial conditions within each country — FRB/US is superior for US policy transmission mechanisms
- Country-level models are less granular than the IMF WEO for sector decomposition within individual economies
- Green transition investment dynamics are less explicitly modelled than in IMF WEO's Climate Transition Risk module
Industry Signal Dashboard
— projected signals from this model across all tracked industries
Growth Rate by Industry
Projected annual real GDP growth rate (%) for each industry under this model's default scenario.
Inflation by Industry
Projected price-level growth rate (%) per industry under this model.
Investment Index by Industry
Capital expenditure growth index — positive values indicate expanding investment activity.
Industry Context
Energy
NiGEM captures the cross-border energy price spillover that defines the energy sector's global risk profile. An oil price shock originating in the Gulf — transmitted through Saudi Aramco's production decisions — propagates through 45+ country models with different fiscal, monetary, and structural responses. For Shell and BP, NiGEM quantifies how EU carbon pricing creates competitive divergence versus non-EU-regulated peers.
Agriculture
NiGEM's multi-country framework captures the trade fragmentation risk for agricultural commodity exporters — how export restrictions in one country cascade into global food price inflation. Bunge and Cargill's South American supply chain positions are the primary calibration anchors for the agri-export fragmentation shock. The fertilizer supply chain (Russia-Belarus potash) is modelled as a cross-border input cost transmission event.
Manufacturing
NiGEM is the primary model for manufacturing trade fragmentation stress testing. It explicitly models how tariff escalation, supply chain reshoring, and critical mineral access restrictions affect manufacturing GVA — ArcelorMittal's CBAM exposure and Toyota's Japan-to-EU export flows are the primary calibration anchors. CBAM exposure of non-EU manufacturers is most accurately captured in NiGEM's bilateral trade flow framework.
Transport
NiGEM captures shipping and freight as a global transmission channel — trade volume shocks propagate to freight volumes and port throughput across all connected economies. Maersk's container rate data is a direct input to NiGEM's trade volume calibration. The model quantifies how trade fragmentation (supply chain regionalisation) reduces total freight distance while increasing per-unit cost — a key DHL and FedEx scenario.
Insurance
NiGEM's relevance for insurance is through the reinsurance market's global risk-pooling function. A severe nat-cat event (modelled using Munich Re and Swiss Re loss data) tightens reinsurance capacity globally, propagating premium increases through NiGEM's financial conditions index. This creates the primary cross-border insurance stress transmission mechanism in CE's model.
Real Estate
NiGEM captures capital flow dynamics driving cross-border real estate investment. When risk appetite falls globally, capital retreats from emerging market real estate to safe-haven markets — Brookfield's global allocation data calibrates this behaviour. NiGEM also captures sovereign credit dynamics that affect public infrastructure finance supporting urban real estate values, relevant to Vonovia's German social housing financing.