Period versus Prediction Period
We will use the phrase "forecast period" to refer to the actual
period in the base dataset, currently 2019:3-2025:4. You may, however,
deal with any
period within the overall 1952:1-2025:4 period, and we will use the phrase
"prediction period" to refer to the period you have chosen. The
is that if you are going to solve the model, the prediction period cannot
The US Model Datasets
Everything about the model is stored in a single dataset:
The dataset for the July 26, 2019, update of the model is called
ZACBASE with a password USBASE.
You will name and create your own dataset, using ZACBASE as a
starting point. Say
you call your dataset NEW and give it the password of NEW. When you first
start, NEW and
ZACBASE are exactly the same, and then NEW gets modified as you make changes
exogenous variables, coefficients, etc.). Once you are done making
changes, you tell the
program to solve the model. The program solves the model, and after this
values of the endogenous variables in NEW are the predicted values. You
can examine (i.e.,
write to the screen, print to a printer, or download to a file) the
values in ZACBASE and in
any datasets you create.
- values on all the endogenous and exogenous variables from 1952:1
- specification information, and
- coefficient estimates.
In many cases one is interested in how the values of the endogenous
variables in NEW
compare to the original values in ZACBASE. Say that you changed federal
of goods (COG) for the forecast period and are interested in how this
change affected real
GDP (GDPR). You can simply tell the program that you want to compare GDPR
in NEW versus
ZACBASE, and it will show you the two sets of values and the differences.
(Once you do this a few times you will get the hang of it.)
WARNING: If you do this comparison for any period beginning earlier than
the beginning of the forecast period, you must use the option to use
the historical errors. See Section 2.6 in Chapter 2 of
The US Model Workbook, July 26, 2019
for more discussion.
The program is flexible as to what you take as your base dataset.
Although the first time
you start the base dataset is ZACBASE, after you have created new ones, you
can use any of
these as your base. For example, if you created NEW and now want to makes
and create NEW1, you simply tell the program that you want NEW as your
base dataset. Once
you have created NEW1, you can either compare the values in NEW1 with
those in NEW or the
values in NEW1 with those in ZACBASE. You do this by simply telling the
program which two
datasets to use for the comparison.
If you make changes to your dataset and do not ask the program to solve
it (which you are
allowed to do), the values of the endogenous variables in the dataset are
with your changes because they are not the solution values. Make sure you
your dataset has been solved. As a general rule, you might always solve
immediately after you have made your changes.
Units of the Variables
The flow variables in the US model are at quarterly rates, and unless
otherwise noted these are the units on the site. Much of the data presented
by the government are at annual rates, and if you want annual rates, just
multiply the flow variables by four.
Changing the Prediction Period
The default prediction period for the July 26, 2019, version of the
model is 2019:3-2025:4.
If you want to change this period, you can use the option
"Set prediction period." For this option, however, you can only enter years,
where the beginning of the prediction period is the first quarter of the
first year and the end is the fourth quarter of the last year.
If you want a different starting quarter, you can do this by going to the option
"Take equations to begin after the beginning of the prediction period" and
entering the quarter you want for all of the equations. For example, if
you want the beginning to be the second quarter of 2008, you would enter
20082 for all of the equations.
The option "Change exogenous variables" does not have the year restriction.
You can enter any quarter, like 20082, for the changes.
If you make wild changes to the exogenous variables or coefficients, the
not solve. When the model does not solve, you will get a solution error
message, and the
existing values of the endogenous variables in your dataset will not be
dataset will still be inconsistent in the sense discussed above.) You
need to be less wild
and try again. As a general rule, you
should not try to push the economy into extreme areas. Macroeconometric
models are not
likely to be reliable when variable values are pushed far beyond their
Examining the Output
If you change the display period from the default in the output part of the
site, you are also restricted to entering only years. This is not, however,
much of a restriction, since all you get are a few more quarters displayed
than you might optimally want. Remember the base dataset for comparison is
ZACBASE with a password of USBASE.
Dataset Names and Storage
The dataset names cannot be longer than EIGHT characters. A common mistake
is to use more than eight characters. The datasets are stored on the
site's hard drive for about three months. If you want to continue to use
a dataset older than three months, simply copy it to a new named dataset,
and the latter will be treated as a newly created dataset.