The US Model on this Website

The US model is a resource for business forecasters, government policy analysts, macroeconomic researchers, teachers, and students. One can on the site:


The US model was developed by Ray Fair in 1974-1976, and it has been used since then for research, forecasting, policy analysis, and teaching. It has been available for use on personal computers since 1983 and was the first such model to be so. (And it was first on the Web!) The current version contains 25 stochastic equations and about 100 identities. The data base begins in the first quarter of 1952. The basic estimation technique is two-stage least squares. The model accounts for all flow-of-fund and balance-sheet constraints, which makes it useful for considering various monetary policy options. A complete description of the model is in Macroeconometric Modeling: 2018.

Comparison to Commercial Models

The main strength of the US model is that it is probably the best approximation of the U.S. economy available. It has been extensively tested and analyzed, and unlike commercial models, it does not have to be subjectively adjusted to produce accurate forecasts. You can have more confidence using the model than using commercial models that the results are actually telling you something about how the macroeconomy works. Commercial models are not even consistently estimated, even though consistent techniques have been available for over 50 years, whereas the US model has been consistently estimated from its beginning. The past forecasting record of the model is updated each quarter, so the user always has a complete record of how the model has done. The first forecast is dated September 23, 1983. See Forecast Record.