That is, past levels of output, together with their pattern of change over time, will influence the level of investment and employment by industry. Each of the country models is linked to the others through trade flows and prices. The links are at both the macroeconomic and sectoral level. The macroeconomic side provides the exchange rates. All other links are at the sectoral level.
Exchange rates are exogenous.
The system emphasizes the flows of goods and services at the industry level between countries together with the price impacts of such flows. The modeling of exchange rates needs a much more sophisticated financial sector in each of the models in order to work since a large determinant of short run exchange rates involves interest rates and capital flows. Such work, however important, has seemed beyond the general scope of the system and more suitable to smaller macroeconomic models. Every six months, both macroeconomic and microeconomic model solutions are updated. In accordance, reviews of details and analysis are also performed in six month intervals and are available upon request.