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Re: [LUG] open economic modelling

 

Tom Potts wrote:
> On Saturday 04 October 2008 10:57, Henry Bremridge wrote:
>> On Sat, Oct 04, 2008 at 09:18:31AM +0100, Tom Potts wrote:
>>> Now I've stopped crowing about how the credit crunch was obvious I'm on
>>> the lookout for open source economic models to play with on my PC.
>>> Anyone seen any?
>> Silly question perhaps but modelling what?
> Er .. the Economy - money flow etc.
> The sort of thing that, when you plug in cancelling the 10% tax band would 
> leave 2million out of pocket.

UK tax detail, so a UK model?

> The sort of thing that would say - oh house prices are collapsing so $200 
> trillion of leveraged 'capital' will evaporate.

200 trillion USD - hmm so a global model. I think they run one at Oxford
Economics.

> The sort of thing you would expect an olevel government to have so it would 
> get an idea of the effect of its economic policies - not 100% accurate but 
> like a short range weather forecast.

"Short range" in weather forecasting is typically under 18 hours -
usually these are very accurate because it is little more than
extrapolation, plus developing a few thunderstorms.

But a key point is that we understand the laws behind weather a lot
better than the economy, and CO2 concentrations aside, we are fairly
confident the laws that govern the weather don't change with time, and
also fairly sure that the laws governing the economy change with
technical progress.

The treasury still use lots of models as far as I know.

Online closed model - simplified treasury model.

http://www.bized.co.uk/virtual/economy/

Fortran code for modelling from Yale.

http://fairmodel.econ.yale.edu/main.htm

But I fear most macroeconomic modelling is done to help provide
empirical support for ideas in economics, rather than for elucidating
the future. I suspect if you find a "policy" that produces great results
from macroeconomic models, it probably says more about the model, than
about the likely effectiveness of that policy.

Thatcher's ignoring of the established economic models at the treasury
probably explains the terrible economic performance of Britain under her
period, but don't say it too loud when Tories are around, as like Mother
Teresa, and the Pope, she is above criticism.

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