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Aggregate Supply in INTERLINK: Model Specification and Empirical Results


  • John F. Helliwell

    (University of British Columbia)

  • Peter Sturm


  • Peter Jarrett


  • Gérard Salou



This paper describes modifications to, and further developments of, the supply block in the Secretariat's INTERLINK world model as of the autumn of 1985. The objective of the work was to strengthen the role of supply side elements, in particular profitability, in the model. In the process, stockbuilding was endogenised, assigning to inventories an important buffer role between sales and output in the dynamic adjustment process. Price formation has been linked more coherently to the revised supply structure via a dual cost function, and labour supply has been endogenised.The equations described in this paper have been incorporated in the latest version of INTERLINK, the simulation properties of which will be described in a separate forthcoming working paper, "The Structure and Simulation Properties of the OECD INTERLINK Model: An Overview" ... Dans le présent article, on décrira les modifications apportées par le Secrétariat jusqu'à l'automne 1985 à son modèle INTERLINK de l'économie mondiale en ce qui concerne le bloc de l'offre, ainsi que les nouveaux travaux effectés dans ce domaine en vue de renforcer le rôle de facteurs tels que la rentabilité. Ce faisant, on a rendu endogène la formation de stocks, qui jouent désormais un rôle important de tampon entre la production et les ventes dans la dynamique de l'a justement. On a en outre lié de manière plus cohérente la formation des prix à la structure révisée de l'offre par l'intermédiare d'une fonction de coût duale, et rendu endogène l'offre de main-d'oeuvre.Les équations décrites ci-après ont été incorporées dans la version opérationnelle la plus récente d'INTERLINK. Un article prochainement publié, "Structure et caractéristiques des simulations du modèle de l'OCDE INTERLINK: Une présentation générale", décrira les résultats de plusieurs variantes de politiques ...

Suggested Citation

  • John F. Helliwell & Peter Sturm & Peter Jarrett & Gérard Salou, 1985. "Aggregate Supply in INTERLINK: Model Specification and Empirical Results," OECD Economics Department Working Papers 26, OECD Publishing.
  • Handle: RePEc:oec:ecoaaa:26-en

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    Cited by:

    1. Hervé, Karine & Pain, Nigel & Richardson, Pete & Sédillot, Franck & Beffy, Pierre-Olivier, 2011. "The OECD's new global model," Economic Modelling, Elsevier, vol. 28(1-2), pages 589-601, January.
    2. Palle S. Andersen, 1987. "Profit shares, investment and output capacity," BIS Working Papers 12, Bank for International Settlements.
    3. Bradley, John & Whelan, Karl & Wright, Jonathan, 1995. "HERMIN Ireland," Economic Modelling, Elsevier, vol. 12(3), pages 249-274, July.

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