Tuesday, 20 August 2013
Macro Model - Update
I've been fairly busy updating my UK macro model for the 2013 Blue Book data, which included significant revisions to the calculation of fixed capital formation. I have added more details to the page including a full equation listing and list of variables.
I'm fairly pleased with the way the model is working, but the more I do, the more areas it seems to open up to explore.
The graphs below show the results of a simulation over the period 1997 Q2 to 2013 Q1. The solid blue line shows the actual data; the red dotted line the simulation.
This is for a full long term simulation. This means that all lagged variables relating to periods from 1997 Q2 onwards are those generated by the model. This inevitably means some compounding of errors, but the strong stock-flow framework tends to pull the results back towards the actual outcomes.