Macroeconomics Seminar - Daniel Rees (Reserve Bank of Australia)

Title: MARTIN Has Its Place: A Macroeconometric Model of the Australian Economy

Abstract: This paper introduces MARTIN - the Reserve Bank of Australia’s new model of the Australian economy. MARTIN is an economy-wide model used to produce forecasts and conduct counterfactual scenario analysis. In contrast to other large-scale models used at the Bank – and at many other central banks – which adhere to a narrow theoretical view of how the economy operates, MARTIN is a macroeconometric model that consists of a system of reduced form equations built to strike a balance between theoretical rigour and empirical realism. We provide an overview of the model, describe its main equations and demonstrate its responses to various scenarios.