A macroeconometric model for Israel 1962-90. A market equilibrium approach to aggregate demand and supply

The specification, estimation, and simulation of a macroeconometric model of the Israeli economy is reported. A distinctive feature of the model is the clear articulation of markets in terms of supply, demand, and price determination. The principal markets consist of output, labor, exports, credit,...

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Bibliographic Details
Published in:Economic modelling 1994-10, Vol.11 (4), p.413-462
Main Authors: Beenstock, Michael, Lavi, Yaakov, Offenbacher, Akiva
Format: Article
Language:English
Subjects:
Economic models
Economic theory
Israel
Macroeconomics
Market equilibrium
Simulation
Supply & demand
Supply and demand
Variables
Online Access:Get full text
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Summary:The specification, estimation, and simulation of a macroeconometric model of the Israeli economy is reported. A distinctive feature of the model is the clear articulation of markets in terms of supply, demand, and price determination. The principal markets consist of output, labor, exports, credit, money, and foreign exchange. All markets are assumed to clear in the short run except the labor market, which clears in the long run. The product market solves for product and for the price level relative to the exchange rate. It is suggested that this is a sensible procedure for inflation-prone economies. The attention to both supply and demand imparts a classical flavor to the model that is fundamentally different from earlier Keynesian attempts to model the Israeli economy.
ISSN:0264-9993
1873-6122
DOI:10.1016/0264-9993(94)90002-7