Tax-benefit models are powerful tools for the analysis of the impact of policy reform, in regular use around the world in government and research organizations. This study focuses on one particular model, POLIMOD. The authors provide an illustration of the type of analysis that can be performed, document the inner layers of data manipulation and model construction that shape its outputs, and examine the reliability of those outputs based on a validation against external sources.

This book contains a collection of specially commissioned papers in which leading economists explore the role of applied economics in informing public policy. The contributions cover macroeconomic modeling, the use of company data to assess economic performance, techniques for data gathering and policy analysis. The book covers a variety of research methods and shows how these have been used in practice to elucidate economic problems. Applied economics is both an art and a science, and this book demonstrates why.