 Comparative Properties of Models of the UK Economy*Keith B. Church, Peter R. Mitchell, Joanne E. Sault and Kenneth Wallis () National Institute Economic Review, 1997, vol. 161, issue 1, 91-110 Abstract: This article analyses the properties of five leading macroeconometric models of the UK economy, in the light of the current discussion of monetary and fiscal policy-making. In simulation experiments, the interest rate and the basic rate of income tax are used to target the inflation rate and to ensure fiscal solvency. Our results show that monetary shocks soon affect the response of quantity variables, and fiscal shocks have monetary consequences, thus the operation of monetary and fiscal policy cannot be separated. Although the Bank of England's view is that it takes two years for monetary policy to have its maximum effect on inflation, our results show that this depends on the approach taken to the modelling of expectations. Date: 1997 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:sae:niesru:v:161:y:1997:i:1:p:91-110 Access Statistics for this article More articles in National Institute Economic Review from National Institute of Economic and Social Research Contact information at EDIRC. |
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