Downloading the MC2 Model
The documentation on the MC2 model can be downloaded by going to the appropriate document and downloading from there.

Data can be downloaded by going to the output phase when you are working with the MC2 model and downloading from there.

If you want to download the MC2 model for use on your own machine, this can be done by downloading the Fair-Parke (FP) program and the MC2 model datasets that go with the FP program. You should have a computer with at least 128MB of memory (although 64MB might work---I am not sure). One of the datasets that needs to be downloaded is about 12 MB in size, and if you don't want to download this dataset over the internet, we can send you a zip disk with the dataset on it. You will need a zip drive to read the disk. If you want the disk, email Please list the size and type of computer that you have.

The following are the downloadable datasets:

FPDST.ZIP    422 KB   Contains FPDST.EXE, the FP compiled program

MC8.ZIP    853 KB    Contains the following:

  • MC8.SP6    Main input dataset
  • MC8US.INP    US input dataset
  • MC8US.DAT    US data read by MC8US.INP
  • MC8EST.INP    Read by MC8.SP6
  • MC8SHR.INP    Read by MC8.SP6
  • MC8SHR1.INP    Read by MC8.SP6
  • MC8SHR2.INP    Read by MC8.SP6
  • MC8XX90.INP    Read by MC8.SP6
  • MC8VAR.INP    Read by MC8.SP6

MC8FINT.ZIP    12,358 KB    Contains MC8FINT.DAT: all the data (1960.1-2003.4)

FPDSTCOD.ZIP    222 KB    Contains FP code if you want to compile yourself.

The following discusses how to work with the MC2 model once you have downloaded it.

To work with the MC2 model, first run at the DOS prompt:


This creates MC8US.COF, which is read by MC8.SP6. (This only needs to be done once.) Then enter commands at the end of MC8.SP6 and then at the DOS prompt enter:


When the job is done, examine OUT.

You need to know how to use the FP program in order to work with the MC2 model. You may want to download the FP test examples from the website and run these first in order to get familiar with the program. (See The Fair-Parke Program.) You may also want to download an executable version of the FP program that uses less memory than does FPDST.EXE. The program loads faster the less memory it uses. FPDST.EXE is only needed when working with the MC2 model.

There are many comments in MC8.SP6 and in the .INP datasets that it calls. You should read these carefully to make sure you know what is going on. You should note the following:

  1. The data in MC8.SP6 begin in 1960.1, but the US model is estimated beginning in 1954.1. This is why MC8US.INP is needed. The US model must be estimated using this dataset and the estimates written to MC8US.COF, which is then read by MC8.SP6.
  2. A number of "tricks" have to be used in MC8.SP6 to link the quarterly and annual data. These are noted in the dataset. The annual data are stored in the first quarter, with the remaining three quarters having "missing" values. A lag of 4 for an annual country is a lag of one year, not four years. All the estimation works for the annual countries except when there is serial correlation of the residuals. For example, RHO=8 means second order serial correlation for the annual countries, but the estimation routine cannot handle this. The coefficient estimates must be entered using the COEF; command, which is noted in MC8.SP6. Solution, however, is fine.
  3. There are two sets of trade share variables (the alphas): A---- and AA----. The AA----'s are the ones predicted by the trade share equations, and the A----'s are the ones that are constrained to sum to 1. The trade flow variables are denoted X----.
  4. A solution period must begin in the first quarter of a year and end in the fourth quarter of a year. Otherwise the tricks of linking the quarterly and annual data do not work.
  5. When working with the MC2 model (LA(344)=1), the FP program orders the equations as the EQ commands are read in regardless of what equation number is on the EQ command itself. For estimation, you must use the number that the FP program has assigned to the equation. This is also true of the MODEQ commands, which are used to specify the first stage regressors. The PRINTMODEL command allows you to see the numbering of the equations.
  6. Note the different treatment before and after 1999.1 regarding the EMU. This is explained in comments in MC8.SP6.
  7. Once you learn how to work with the MC2 model in the FP program, all the FP commands are at your disposal, and so much experimentation can be done. You can add variables without worrying where they come in the list of variables. However, if you add equations, you must know where the program has put them (i.e., in the order in which they are read). If you put an equation other than at the end, this will foul up the estimation and MODEQ commands, which use the order that now exists. Unless you want to change these commands, it is best that you add new equations at the end of the existing equations. If you want to drop an equation without affecting the order, use the command:
    EXOGENOUS VARIABLE="name of left hand side variable" DROP;
    This means that the equation will never be used, but it still remains in the list and so the order is still the same.