It also recognises that financial markets are deregulated and forward-looking. In addition, it has a neoclassical long run which gives and integrated and consistent treatment of the investment, employment, production, importing, exporting and pricing decisions of the business sector. Most of the model s parameters are estimated using quarterly data extending from 1976 to the present.
Special attention is paid to dynamic behaviour and statistical diagnostic testing.
Demographic scenarios in MM-macro are generated useing a new demographic module developed in collaboration with the Bureau of Immigration and Population Research. The current version of MM-macro is used on microcomputers in economic departments and agencies in Canberra, financial institutions and companies, business umbrella groups and at universities. Its results are at the sectoral level and refer to a long-run equilibrium. It will then be possible to analyse the dynamic effects of microreform at the sectoral level and to generate sectoral-level forecasts. Time series data for value added, employment, consumption, investment and trade flows are only available at this more aggregate level.