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

Author

Listed:
  • Alexander Ballantyne
  • Tom Cusbert
  • Richard Evans
  • Rochelle Guttmann
  • Jonathan Hambur
  • Adam Hamilton
  • Elizabeth Kendall
  • Rachael McCririck
  • Gabriela Nodari
  • Daniel M. Rees

Abstract

This paper introduces MARTIN, the Reserve Bank of Australia's new model of the Australian economy. MARTIN is an economy‐wide model used for forecasting and counterfactual scenario analysis. In contrast to other 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.

Suggested Citation

  • Alexander Ballantyne & Tom Cusbert & Richard Evans & Rochelle Guttmann & Jonathan Hambur & Adam Hamilton & Elizabeth Kendall & Rachael McCririck & Gabriela Nodari & Daniel M. Rees, 2020. "MARTIN Has Its Place: A Macroeconometric Model of the Australian Economy," The Economic Record, The Economic Society of Australia, vol. 96(314), pages 225-251, September.
    • Handle: RePEc:bla:ecorec:v:96:y:2020:i:314:p:225-251
    DOI: 10.1111/1475-4932.12531
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    6. Boug, Pål & Brasch, Thomas von & Cappelen, Ådne & Hammersland, Roger & Hungnes, Håvard & Kolsrud, Dag & Skretting, Julia & Strøm, Birger & Vigtel, Trond C., 2023. "Fiscal policy, macroeconomic performance and industry structure in a small open economy," Journal of Macroeconomics, Elsevier, vol. 76(C).
    7. Fisher, Lance A. & Kingston, Geoffrey, 2022. "Medium-run determinants of real wages in Australia," Economic Analysis and Policy, Elsevier, vol. 76(C), pages 1098-1107.
    8. Xianglong Liu & Jason Nassios & James Giesecke, 2022. "Oil Supply Shocks and Tax Policy Responses in Australia: Insights from a Dynamic CGE Framework," Centre of Policy Studies/IMPACT Centre Working Papers g-336, Victoria University, Centre of Policy Studies/IMPACT Centre.
    9. Anthony Brassil & Mike Major & Peter Rickards, 2022. "MARTIN Gets a Bank Account: Adding a Banking Sector to the RBA's Macroeconometric Model," RBA Research Discussion Papers rdp2022-01, Reserve Bank of Australia.
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    11. Chris Murphy, 2023. "Fiscal Policy in the COVID‐19 Era," Economic Papers, The Economic Society of Australia, vol. 42(2), pages 107-152, June.
    12. Nicholas Garvin & Samuel Kurian & Mike Major & David Norman, 2022. "Macrofinancial Stress Testing on Australian Banks," RBA Research Discussion Papers rdp2022-03, Reserve Bank of Australia.
    13. Isaac Gross & Andrew Leigh, 2022. "Assessing Australian Monetary Policy in the Twenty‐First Century," The Economic Record, The Economic Society of Australia, vol. 98(322), pages 271-295, September.
    14. Elshurafa, Amro M. & Alatawi, Hatem & Hasanov, Fakhri J. & Algahtani, Goblan J. & Felder, Frank A., 2022. "Cost, emission, and macroeconomic implications of diesel displacement in the Saudi agricultural sector: Options and policy insights," Energy Policy, Elsevier, vol. 168(C).
    15. Kim Nguyen, 2022. "The Real Effects of Debt Covenants: Evidence from Australia," RBA Research Discussion Papers rdp2022-05, Reserve Bank of Australia.
    16. Chris Murphy, 2020. "Decisions in Designing an Australian Macroeconomic Model," The Economic Record, The Economic Society of Australia, vol. 96(314), pages 252-270, September.
    17. Gulnara Nolan & Jonathan Hambur & Philip Vermeulen, 2023. "Does Monetary Policy Affect Non-mining Business Investment in Australia? Evidence from BLADE," RBA Research Discussion Papers rdp2023-09, Reserve Bank of Australia.
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    JEL classification:

    • C32 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes; State Space Models
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • E10 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - General
    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • E47 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Forecasting and Simulation: Models and Applications

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