The Bank of England Quarterly Model, published in January 2005, contains details of the new macroeconomic model developed for use in preparing the Monetary Policy Committee's (MPC) quarterly economic projections, together with a commentary on the motivation for developing the new model and the economic and modelling approaches underlying it. An overview of the new model was initially published in April 2004 (reprinted in the Summer 2004 Quarterly Bulletin). The book discusses the model in more detail and illustrates the overall model properties with the results from some stylised simulations. A number of appendices give details of model equations, data sources and parameter values.
The projections for growth and inflation included in the Bank's Inflation Report are always the result of judgements by the MPC rather than a mechanical output from models. Nonetheless, when producing its economic projections, the MPC has found it helpful to use a macroeconomic model to combine the various judgements and assumptions made. The new model uses recent advances in economic understanding and computational power to develop and improve upon existing models used at the Bank. The new model has replaced the previous Medium-Term Macro Model as the main tool in the suite of models employed by Bank staff and the MPC in the construction of the projections contained in the quarterly Inflation Report.
The Bank's use of a suite of models was described in the book, Economic models at the Bank of England, published in 1999; the Medium-Term Term Macro Model was described in an update to that book published in September 2000.
In addition to the physical publication, below, an ASCII file containing the model equations is also available; and a PDF file giving the detailed derivations (540k) of the decision rules for households, firms and unions.
The book is available below in PDF format.
The Bank of England Quarterly Model (1mb)
For ease of downloading the report is split into smaller sections, which can be accessed by the links below:
The price of the book is £10.00 plus p&p. Details of how to purchase, or any further information about the publication, may be obtained by contacting:
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