Demonstration

The PC-Ready Reckoner program

Click here to download the self-exploding zip file.

The PC-Ready Reckoner program is based on the results of three leading macroeconomic models of the UK economy - those of Her Majesty's Treasury (HMT), the London Business School (LBS) and the the National Institute of Economic and Social Research (NIESR) - and calculates the macroeconomic effects of, and an economic forecast based on changes in economic policy devised by the user. The program does not contain full-scale representations of each of these models, but instead summarizes their main properties through the use of ready reckoners. A ready reckoner represents a summary of the properties of a macroeconomic model in respect of a given change in a particular exogenous variable (such as the income tax rate) on a selection of macroeconomic indicators (such as GDP and inflation).

The use of macroeconometric models for the purposes of policy analysis and forecasting is now well established in the United Kingdom. These models provide fully elaborated, internally consistent, quantitative estimates of macroeconomic outcomes to inform the policy debate, and are also used in the development and testing of economic theories. However, partly because of their complexity, access to these models has in the past been limited to experienced practitioners. This situation has improved in recent years both with the establishment of the ESRC Macroeconomic Modelling Bureau at the University of Warwick, allowing academics to access the main macro models of the UK economy, and through developments in personal computing which have enabled large-scale models, such as the National Institute model, to be run on a PC. The main motivation behind the development of the Ready Reckoner program has been to promote this dissemination process further by devising a simple-to-use program which runs on any IBM- compatible PC, and which can give hands-on access to results from the leading UK macroeconometric models to users with little or no previous experience of such models.

The PC-Ready Reckoner program was written by Garry Macdonald (Murdoch University, Perth, Australia) and David Turner (OECD, Paris, France), and is maintained by the ESRC Macroeconomic Modelling Bureau.

Using the PC-Ready Reckoner program

The pictures below are captured directly from the program. Some of the images may require you to "maximise" the size of your WWW window. After starting PC-Ready Reckoner, the following screen will appear.

***** The first screen you see when you start off the program

The central menu details some of the possible options that the program user has. The first requirement is that a model be selected.

*****A picture of all the options

The program then allows you to examine the published forecast and the assumptions about government policy and world conditions that determine it.

*****Picture of the numbers in the LBS economic forecast

The user can pick and change one or more of any of the following tools of economic policy or change the assumptions on world trade growth and world inflation.

*****...A list of policy options

In this example we increase domestic interest rates by one percentage point in the Treasury model from 1994 onwards.

*****A screen dump of the revised interest rate forecast

We can now examine both tables of results and graphs which show how the change in the interest rates has affected the forecast in the Treasury model. This is possible for a variety of macroeconomic indicators

*****A graph of consumers' price inflation

Finally, the results from conducting the experiment on one model can be compared to the same shock implemented on the other two models.

*****The picture compares HMT, LBS and NIESR results...

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