Repository of macro models
This repository contains descriptions of macro-models which relate to papers published or forthcoming in Economic Modelling
EU Aggregate Model
Title of Paper: An Aggregate Model for the European Union
Author: Alberto Bagnai, Francesco Carlucci
Dipartimento di Economia Pubblica, Università di Roma I via del Castro
Laurenziano 9, I-00161, Rome, Italy
Vol./Issue No.:
Short description: We present the structure and properties of an aggregate model for the European Union, consisting of 34 equations estimated on annual data aggregated over the twelve-member EU, ranging from 1960 to 1997. Estimation was performed by a two-stage procedure taking into account the possible presence of structural breaks in the long-run parameters and allowing for nonlinearity and simultaneity of the dynamic equations. The estimated equations have a very good fit and pass a number of diagnostic tests, suggesting that EU-wide behavioural equations can be defined in a meaningful way. Simulation experiments show that the model is an agile and effective tool for the study of the European economy at an aggregate level. In particular, the model is shown to improve over previous aggregate explanations of the European economy, in that its dynamic multipliers provide a better account of the European unemployment and inflation dynamics in the last decade.
JEL classification: JEL C30, JEL C51, JEL C43, JEL O52
Keywords: Simultaneous equation model, Model contruction and estimation, Aggregation, Europe
County/continent/region the model applies to: Europe
Linkage address: http://eumodel.net
Disclaimer: Responsibility for the full model structures of the models in this repository rests solely with the authors.