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Using the Murphy Model to Provide Short‐run Macroeconomic Closure for ORANI

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Listed:
  • JAMES H. BREECE
  • KEITH R. McLAREN
  • CHRISTOPHER W. MURPHY
  • ALAN A. POWELL

Abstract

A macro model incorporating rational expectations in financial markets (the Murphy Model–MM) is used to endogenize the macroeconomic environment for a comprehensive general equilibrium model (ORANI). The interface exploits the existence of variables which are endogenous to both models, calibrating on a shock to government spending. Prospective benefits include: (1) to the numerous policy oriented users of ORANI, a facility allowing the macroeconomic environment to be determined by a macrodynamic model such as MM; (2) to these users, reassurance that ORANI's short‐run translates in calendar time to about two years; (3) to the clientele of a macro model, the possibility of much more detailed projections.

Suggested Citation

  • JAMES H. BREECE & KEITH R. McLAREN & CHRISTOPHER W. MURPHY & ALAN A. POWELL, 1994. "Using the Murphy Model to Provide Short‐run Macroeconomic Closure for ORANI," The Economic Record, The Economic Society of Australia, vol. 70(210), pages 292-314, September.
    • Handle: RePEc:bla:ecorec:v:70:y:1994:i:210:p:292-314
    DOI: 10.1111/j.1475-4932.1994.tb01849.x
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    References listed on IDEAS

    as
    1. Murphy, C W, 1988. "An Overview of the Murphy Model," Australian Economic Papers, Wiley Blackwell, vol. 27(0), pages 175-199, Supplemen.
    2. P.D. Jonson & W.J. McKibbin & R.G. Trevor, 1980. "Models and Multipliers," RBA Research Discussion Papers rdp8006, Reserve Bank of Australia.
    3. Bruce F. Parsell & Alan A. Powell & Peter J. Wilcoxen, 1991. "The Effects of Fiscal Restraint on the Australian Economy as Projected by the Murphy and MSG2 Models: A Comparison," The Economic Record, The Economic Society of Australia, vol. 67(2), pages 97-114, June.
    4. Murphy, C W, 1988. "Rational Expectations in Financial Markets and the Murphy Model," Australian Economic Papers, Wiley Blackwell, vol. 27(0), pages 61-88, Supplemen.
    5. Bruce F. Parsell & Alan A. Powell & Peter J. Wilcoxen, 1989. "The Reconciliation of Computable General Equilibrium and Macroeconomic Modelling: Grounds for Hope?," Centre of Policy Studies/IMPACT Centre Working Papers ip-44, Victoria University, Centre of Policy Studies/IMPACT Centre.
    6. Pearson, K. R., 1988. "Automating the computation of solutions of large economic models," Economic Modelling, Elsevier, vol. 5(4), pages 385-395, October.
    7. repec:bla:ecorec:v:59:y:1983:i:165:p:166-79 is not listed on IDEAS
    8. repec:bla:ecorec:v:67:y:1991:i:197:p:97-114 is not listed on IDEAS
    9. Dixon, Peter B. & Parmenter, B. R. & Powell, Alan A., 1984. "The role of miniatures in computable general equilibrium modelling : Experience from ORANI," Economic Modelling, Elsevier, vol. 1(4), pages 421-428, October.
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    Cited by:

    1. James B. Davies, 2004. "Microsimulation, CGE and Macro Modelling for Transition and Developing Economies," WIDER Working Paper Series DP2004-08, World Institute for Development Economic Research (UNU-WIDER).
    2. James B Davies, 2009. "Combining microsimulation with CGE and macro modelling for distributional analysis in developing and transition countries," International Journal of Microsimulation, International Microsimulation Association, vol. 2(1), pages 49-56.
    3. Dixon, Peter B. & Koopman, Robert B. & Rimmer, Maureen T., 2013. "The MONASH Style of Computable General Equilibrium Modeling: A Framework for Practical Policy Analysis," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 23-103, Elsevier.

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    More about this item

    JEL classification:

    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications

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