ORANI-F and MONASH: General Equilibrium Models of the Australian Economy for Medium-Run Forecasting

Since the mid-1980s ORANI-F has been the main vehicle used by the research team now located at the Centre of Policy Studies (CoPS) for forecasting the average annual growth rates of macroeconomic and structural variables over the medium-run periods (six years, say). The model contains enough dynamics to accumulate variables such as capital stocks and foreign debt over the medium term but not enough to give convincing year-to-year time paths for the variables. In this paper we describe a 22-sector version of ORANI-F which is available to users outside the CoPS research team in a fully documented PC version. The CoPS team is in the process of moving to a new model, called MONASH , with enough dynamics to allow sectorally disaggregated annual forecasts which track externally projected business-cycle phenomena. We compare forecasts from MONASH and ORANI-F for the period 1990-91 to 1996-97.