More about the ESRC Macroeconomic Modelling Bureau
The Macroeconomic Modelling Bureau was established at the University of Warwick by the Economic and Social Research Council in September 1983, for four years in the first instance. In the course of its investigation into macroeconomic research in the United Kingdom a Research Council committee had considered the case for setting up a new centre, to undertake comparative research on existing models of the UK economy and to help achieve greater openness and understanding of the models and their associated forecasts and policy analysis. The committee also recommended the establishment of the Macroeconomic Modelling Consortium, to coordinate support for a programme of research in macroeconomic modelling provided by the Research Council, HM Treasury and the Bank of England, and to manage this on a four-year cycle. The Bureau received Consortium support in each of its four four-year phases, albeit at a declining level, until the programme was discontinued in 1999. At this time the ESRC introduced a new research programme titled 'Understanding the Evolving Macroeconomy'.
The main purpose of the Bureau was to improve the accessibility of macroeconomic models of the UK economy, to promote general understanding of the properties of these models, and to undertake its own comparative and methodological research. To support this work current versions of models and their associated databases were regularly deposited at the Bureau; for Consortium-supported modelling projects this was a condition of their own research contracts. The London Business School and National Institute of Economic and Social Research models were, like the Bureau, supported in all four phases of the research programme; other groups supported for shorter periods were the Cambridge Growth Project, the Cambridge SVAR project, the Cambridge University Small UK Model (CUSUM), City University Business School, the 'COMPACT' model group based in Exeter and Glasgow, and the Liverpool research group in macroeconomics. Inclusion of the model of HM Treasury was part of the Bureau's contract, also the models of the Bank of England and Oxford Economic Forecasting were occasionally deposited voluntarily. Although the main focus was on models of the UK economy, in due course the Bureau extended its comparative research to several multi-country models, with the support of the ESRC Global Economic Institutions research programme and the Leverhulme Trust.
During the first four-year contract the principal output of the Bureau's comparative research programme was a series of annual review volumes, published by Oxford University Press under the general title Models of the UK Economy (K F Wallis et al.; 1984-87). These contained systematic appraisals of model properties and forecast performance, and a sequence of studies on various related research topics. Subsequently dissemination of research findings continued via discussion papers, academic journals, and other channels; regular studies of comparative model properties appeared in the National Institute Economic Review. Discussion papers were also contributed by other researchers for whom this represented a suitable medium of communication and dissemination.
The Bureau regularly arranged Macroeconomic Modelling Seminars to discuss its programme of work and general matters of concern to modellers, macroeconomists, and model users; one meeting a year was a residential seminar held at Warwick. A regular Newsletter covered developments in macroeconomic modelling, the Bureau's research programme, and seminar arrangements. A simple-to-use PC program based on ready-reckoner results from the models was developed. This gives students hands-on access to results from large-scale models and proved very successful. The same approach to macroeconomic policy analysis was subsequently combined with the approach of the Institute of Fiscal Studies' "Be Your Own Chancellor" internet service to develop the Virtual Economy website, with the support of the Nuffield Foundation.
The Director of the Bureau throughout its existence was Professor K.F. Wallis. The full-time research staff of the Bureau were M.J. Andrews (1983-86), D.N.F. Bell (1983-85), K.B. Church (1990-99), P.G. Fisher (1983-1990), J.A. Longbottom (1985-87), P.R. Mitchell (1990-98), J.E. Sault (1994-99), S. Sgherri (1998-99), P.N. Smith (1992-95), S.K. Tanna (1987-1990), D.S. Turner (1986-1991), and J.D. Whitley (1983-92). In addition, with the support of the Human Capital and Mobility Programme of the European Community, four HCM fellows were associated with the Bureau for 12 or 24 months during 1995-97, namely R.C. Douven, R. Madlener, H.M.M. Peeters and O. Salome.
Further information about Bureau activities can be found in the end-of-award reports submitted to the ESRC covering the periods 1991-95 and 1995-99 respectively. Independent appraisal and discussion is available in three papers by Ron Smith (Birkbeck College), as follows:
- (1990). The Warwick ESRC Macroeconomic Modelling Bureau: an assessment. International Journal of Forecasting, 6, 301-309.
- (1994). The macromodelling industry: structure, conduct and performance. In Applied Econometric Forecasting Techniques (S.G. Hall, ed.), pp.68-88. Hemel Hempstead: Harvester Wheatsheaf.
- (1998). Emergent policy-making with macroeconometric models. Economic Modelling, 15, 429-442. (Reprinted in Empirical Models and Policy-Making: Interaction and Institutions (F.A.G. den Butter and M.S. Morgan, eds), pp.244-256. London: Routledge, 2000)