Journal Issue

Summary of WP/92/110

International Monetary Fund
Published Date:
January 1993
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Summary of WP/92/110

“Macroeconomic Models for the PC” by Willem Bier

This paper describes a menu-driven computer program that can be used to build simultaneous equation macroeconomic models that can include several different feedback mechanisms. The program can specify up to 18 behavioral equations for the national accounts, the public sector, the monetary sector, the balance of payments, and foreign debt. Each equation can have between 5 and 11 independent variables, which can be designated either endogenous or exogenous.

The program can also perform simulations of alternative adjustment and growth policies by varying any of the exogenous variables; the experiments can be repeated for different model specifications. This paper describes a number of simulations with a standard model of an open economy in which output and prices are endogenous. The program calculates the value of more than 75 macroeconomic variables for five years: the results can be printed, viewed in the form of charts and tables, and imported into a Lotus 1-2-3 file. This program can be used to build many of the macro models that have been published in the IMF as well as other models.

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