Comparative Properties of Models of the Uk Economy

Abstract

This paper describes the current versions of six major macroeconometric models, using their wage-price-exchange rate interaction as a core supply-side framework in which to interpret their properties, as revealed in standard simulation experiments. Analysis of the individual relationships reveals several deviations from this framework in the majority of the models, precluding a straightforward derivation of their long-run properties. Despite differences in their supply-side treatment the models are essential to a description of the inflationary processes in the economy and, more generally, through ready-reckoners, to the provision of a quantitative assessment of policy options.