The Orani-Macro Interface: An Illustrative Exposition*
*The authors wish particularly to thank Alan Powell for his encouragement, constructive criticism and guidance. Thanks are also due to Peter Dixon. Brian Parmenter, Russell Rimmer and Dennis Sams at IMPACT for their helpful contributions. and to Peter Jonson, Warwick McKibbin and Rob Trevor of the Reserve Bank for their help in providing access to RBA79 and for their comments on an earlier version. Of course, the authors accept full responsibility for any possible misuse or misunderstanding of either the ORANI or RBA79 models.
Abstract
The paper provides on illustration of the procedure used to interface the MACRO and ORANI modules of the IMPACT Project. The main interfacing problem is that of temporal aggregation. This problem arises when information is to be passed between a dynamic disequilibrium model such as MACRO and a comparative static general equilibrium model such as ORANI. A diagrammatic treatment of the solution to this problem is presented. The procedure is then illustrated by a numerical experiment.
