                                    Preliminary,  12 June 1991

               TOWARDS AN ECONOMIC MODEL FOR MALTA
                    dr. Marein van Schaaijk


(An improved version of the Malta model is presented in the 'Mini-
conference on Macro Model Building for Small Economies', Suriname
26-28 July 1992:
Marein van Schaaijk and Lino Briguglio:"A model for the Maltese
Economy"  One can obtain this paper togheter with a disk with the
model by sending a letter to Stuseco, C. Jolstraat 50, 2584ET The
Hague, The Netherlands.)


Statistical sources for Malta:

For Malta we used the following statistical publications:
-Central Office of Statistics-Malta:"National Accounts of the
Maltese Islands 1989" Idem 1984 and idem 1968-1977
-Central Office of Statistics-Malta:"Abstract 1989"
-Central Office of Statistics-Malta:"Industrial Statistics 1988"
-Central Bank of Malta:"Quarterly Review December 1990"
-Economic  Planning   Division,  Ministry   for  Economic  Affairs
Malta:"Economic  Survey  January-September  1990    (The  National
Accounts Division of the Statistical Office gave us also a copy of
the "Main economic indicators" for the years 1966-1985).
-Lino Brugiglio:"The Maltese Economy", Malta,1988.
-Lino Bugriglio:"Some characteristics of Small Economies", COBWEB,
Spring 1991.

Thanks to the  good organised statistics,  especially the National
Accounts, of Malta, we  could collect the data  in a visit of less
than three hours to Valetta.  Four evenings working were enough to
fill up  the  primary  datafile with  its  seventy  variables. Ten
seconds later we had whole MACROABC  for Malta for the years 1972-
1989 available (see in the disk, which is free to copy).

MACROABC deliveres all the data which are needed to estimate the
behavioural equations.




Main behavioural equations estimated for MALTA
(excl. micro block):


%changes                        estimation period: 1974-1989


Instead of micro block:

The next three  macro equations  are only  temporaly used, waiting
for the construction  of a micro  block for the  export sector (T-
values in parenthesis):


The exportprice(BPP) is a function  of importprices (MPP) and wage
costs (HPEPWP):

BPP=  .9  +.6*MPP  +.2*HPEPWP                    RR=.92 DW=2.1
      (1.4) (10.6)   (1.8)

The export value  as a  function of the  difference between export
and import prices:

BWP=  10.9  -2.4*(BPP - MPP)                     RR=.37 DW=.9
      (3.6) (2.8)
The investments(IBWP) in  industries as a  function of gross value
added of industries:

IBWP= 4.8   +0.8*YBWP                            RR=.15 DW=2.1
       (.6)  (1.6)

It appears not possible to  make a good investmentequation without
a micro block for the exportsector, with a breakdown of exports to
tourisme, ship construction etc.
Graph 1.
Macro block:

The  change  in  value  of  consumption(CGWP)  as  a  function  of
disposable income of wage earners (LBESQW) and profits (ZBESQW):

CGWP=  2.7   +69*LBESQW +16*ZBESQW               RR=.48 DW=2.4
      (1.0)  (2.6)      (0.6)

The change in  quantity of imports  as a function  of final output
and importshares(VHMVP)  and difference  in internal  and external
inflation (CGMPP=CGPP-MPP):

MVP= -2.9    +1.3*VHMVP +.2*CGMPP                RR=.64 DW=1.3
      (1.3)  (4.8)      (.8)


The growth of employment in industries(ABAP) as a function of
growth of final output and corresponding labourintensities (VA),
and the change in unemployment rate:

ABAP= -0.9 +0.59*VA(-1) -0.23*WWQD               RR=.28 DW=1.5
      (.4)  (1.9)        (.2)       (simultaneously with WWQD)

The  change  in   unemployment  rate  (WWQD)   as  a  function  of
demand(ABAP) and demand (POTBAP):

WWQD= -.3  -.23*ABAP +.64*POTBAP                 RR=.58 DW=2.5
      (.5)  (2.1)     (3.9)         (simultaneously with ABAP)

The change in  wage(LBABPP) followes  the consumptionprices (CGPP)
and unemployment change:

LBABPP= 2.8  +1.3*CGPP(-1) -1.3*WWQD             RR=.55 DW=2.2
       (1.3)  (4.0)         (1.3)

The  investmentprice   change   (IPP)   as  a   function   of  the
costdevelopment (HPMI=.54*MPP+.46HPEPWP):

IPP=    1.8  +.9*HPMI                            RR=.54 DW=1.7
        (1.0)  (4.0)

The change in consumtionprices as a function of cost development
(HPMC=.27MPP+.73HPEPWP) and change in indirect tax rate (TKQ)

CGPP=   1.3  +.55*(HPMC TKQ- TKQ(-1))            RR=.60 DW=2.3
        (1.2)  (4.6)

Moneygrowth as  a function  of  monetary financing  bij government
(FINWD) and surplus on the balance of payments (RESWD):

LIQWP=  6.3  +.6*FINWD +.6*RESWD                 RR=.62 DW=2.1
        (5.5)  (1.7)    (4.6)

Graphs 2
Graphs 3
Some semi-behavioural equations, only about taxes:
(no % changes, but levels)

Importduties (TMWN) as a function of the value of imports (MWN):
TMWN= -2.0 + 0.08*MWN                            RR=.96 DW=.8
       (1.2)  (17.7)

Taxes on consumption(TCWN)  as a function  of value of consumption
(CGWN):

TCWN= -.6  + 0.07*CGWN                           RR=.97 DW=.7
        (.7)  (21.0)

Direct taxes  on  industries(TDBWN)  as a  function  of disposable
profit income:

TDBWN= 1.2 + 0.06*(ZBESBWN(-1)+TDBWN(-1) )       RR=.93 DW=.7
       (1.5)  (13.7)

Direct taxes on persons (TDGWN) as a function of disposable income
of employees (LBESBWN) and profits (ZBESBWN):

TDGWN= 2.9 + 0.11*(ZBESBWN(-1)+LBESBWN(-1))      RR=.93 DW=.50
       (.8)  (13.2)

NAMES OF VARIABLES IN MAIN BEHAVIOURAL EQUATIONS:

ABAP     number of jobs in enterprises growt %
BPP      export price %
BBPMWP   value gross domestic product %
CGPP     consumption price %
CGWN     value consumption households
CGWP     value consumption households %
CGMPP    consumption price % minus import price %
FINWD    financial shortage of government in % moneyvolume t-1
HPMC     function of wage costs and import costs
HPMI     function of wage costs and import costs
IBWP     value investment enterprises %
IBMWPQ   value investments in micro block % in share total
IPP      investment price %
LBABPP   growth of wages per caput in enterprises
LBESBWN  disposable wage income
LBESQW   disposable wage income % share in total
LIQWP    money growth %
MVP      volume imports %
MWN      value of imports
POTBAP   growth of potential labour force excl civil servants
RESWD    surpluss on balance of payments in % money volume t-1
TCWN     taxes on consumption
TDBWN    direct taxes on enterprises
TDGWN    direct taxes on households
TKQ      tax pressure
TMWN     import duties
VA       final output reweighted by labourintensity minus
         number of jobs, divided by number of jobs year before
VHMVP    final output reweighted to importintensities
WWQD     unemployment rate this year minus year before
YBVP     volume gross value added enterprises
YIWP2    value gross value added enterprises excluding
          exports, half a year delay
ZBESBWN  disposable income profits
ZBESQW   disposable profit income % in share total

....AU   autonomous or correction factor
                Historical simulations for Malta.

Next, that dataset   has been used as  input in the model MACMICS,
instead of  the dataset  of  Microland. Furthermore,  a historical
simulation has been  made for the  period 1975-1980, starting with
the data of  the year  1975 and for  the years  1975-80 using only
information about  the  exogenous variables  (mainly international
prices, natural  growth  of  the population,  value  of government
consumption). This is  also done  starting in 1983  for the period
1983-1989. Subsequently, the  constant factors  in the behavioural
equations have been  enlarged with the  average difference between
the result of historical simulation  and realisation figure of the
relevant dependent  variable. Furthermore,  the parameters  of the
tax equations are improved. After this "calibration" we made again
simulation from year to  year, starting with the  data of the year
1975, and for  later years up  to 1980 only  information about the
exogenous variables.We made such  a historical simulation also for
the period 1983-1989.  These simulations appeared  to be technical
successful: We will give  the results at  the conference, and will
show the differences between simulates figures and reality.

  Of course  this  technical success  does  not give  a  model for
Malta.  Practical   usefullness   asks  more   than   these  brief
"calibration":
a) the estimates of the  behavioural equations have to be repeated
over a  longer  period than  the  years 1974-1989  which  we used,
and/or -especially in  the case of  the semi-behavioral equations-
we need to use expert information of economists which are familiar
with the sitaution of Malta.
b) one has to construct a micro block for the main products of the
exportsector which is tailored on the specific situation of Malta,
i.c. tourism.

More about this subject and practical use of the model at the
Conference 23-25 May in Malta.

See also the files  with additional information  in the disk which
will be freely available for members of the Conference!

Inside disk MICROLAND-MALTA:

-dataset MALTA 1972-1989
-book-keeping program MACROABC(to use with a spreadsheet)
-the model MACMICS togheter with a solution program, which may be
freely distributed
-batch files
-text files, for example "A Macro Model for a Small Economy"

Further analysis of the economy of Malta


(not tready yet)


SELECTED LITERATURE


See for  a  extensive list  of  literature and  sources concerning
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"Micromacrodataset",  ISBN   9073732026,  Published   by  Stuseco,
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APPENDIX   MODELEQUATIONS OF MACMIC



@The MODEL MACMIC

@The MICROBLOCK:

@The micro price equations:
BAUZ=BAUSPL-.7930975-.8113984*BAUWPL+.1707517*(JAAR=1973)-
.1707517*(JAAR=1974)-.3332637*(JAAR=1982)-.3332637*(JAAR=1983)
ALAZ=ALASPL-3.893262D-02-1.015077*ALAWPL(-1)-.2365038* (JAAR=1974)
-.2365038*(JAAR=1975)+.2365038*(JAAR>1984)
ALUZ=ALUSPL+1.077842-1.174983*ALUWPL(-1)-.3279996*(JAAR=1974)
RIJZ=RIJSPL-.8282516*RIJWPL-1.376414*LOG(JAAR-1900)+5.927318
KOFZ=KOFSPL-1.707305*KOFWPL(-1)-.1228273
SUIZ=SUISPL-.33617*SUIWPL-2.501786*LOG(JAAR-1900)+11.56138
BACZ=BACSPL-.8382628*BACWPL(-1)-3.116287*LOG(JAAR-1900)+13.63566
GARZ=GARSPL-1.232372*GARWPL+.3829498
HOUZ=HOUSPL-.809807*HOUWPL+.2570027
TRIZ=TRISPL-.8281227*TRIWPL-.1365942
ZBAU=BAUCEMNL-3.776409-1.853751*BAUPKQL-0.40*(JAAR<1958)
ZALA=ALAEMNL+1.886929D-02-.9972573*ALACAP
ZALU=ALUEMNL+.2304259-.9366913*ALUCAP
ZRIJ=RIJCEDNL-.8209806*RIJHNL+6.098359-.5299632*LOG(JAAR-1945)
ZSUI=(SUIEDNL+14.45917-2.028471*SUIHNL(-1))*(JAAR<1973)
ZGAR=GAREDNL-5.190118-1.405102*GARPKQL(-1)
ZHOU=HOUEKNL-18.37827-2.090555*HO3PKQL
ZTRI=(TRIEKNL-13.4-1.66*TRIPKQL(-1))*(jaar>1963)+(TRIEKNL-
DTRI)*(Jaar<=1963)
suihnd=suihnl-suihnl(-1)
bauwpd=bauwpl-bauwpl(-1)
alawpd=alawpl-alawpl(-1)
aluwpd=aluwpl-aluwpl(-1)
rijwpd=rijwpl-rijwpl(-1)
kofwpd=kofwpl-kofwpl(-1)
suiwpd=suiwpl-suiwpl(-1)
bacwpd=bacwpl-bacwpl(-1)
garwpd=garwpl-garwpl(-1)
houwpd=houwpl-houwpl(-1)
triwpd=triwpl-triwpl(-1)
BAUSPD=9.593454D-04+.7747919*BAUWPD-.5884052*BAUZ(-1)-
.1443335*(JAAR=1973) +.1443335*2*(JAAR=1974)-.144335 *(JAAR=1975)
+.2377531*(JAAR=1982)-.2377531*(JAAR=1984)
ALASPD=-1.781736D-03+.9919761*ALAWPD(-1)-.6952929*ALAZ(-1)
+.206703*(JAAR=1974)-.206703*(JAAR=1976)-.206703*(JAAR=1985)
ALUSPD=.8890362*ALUWPD(-1)+1.881834D-02-.6314322*ALUZ(-1)
+.2048469*(JAAR=1974)-.2048469*(JAAR=1975)
RIJSPD=.774747*RIJWPD-.8412284*RIJZ(-1)+1.616053D-02
KOFSPD=1.93865*KOFWPD(-1)-.801452*KOFZ(-1)+1.811008D-02
SUISPD=.6848631*SUIWPD-.7655394*SUIZ(-1)+3.225243D-02
BACSPD=.4436249*BACWPD(-1)-.5035711*BACZ(-1)+5.889181D-02
GARSPD=.6712908*GARWPD-.7234337*GARZ(-1)+4.632227D-02
HOUSPD=.1567553*HOUWPD-.2753487*HOUZ(-1)+3.592617D-02
TRISPD=.2757269*TRIWPD-.5279354*TRIZ(-1)+4.239575D-02
bauspl=bauspl(-1)+bauspd
alaspl=alaspl(-1)+alaspd
aluspl=aluspl(-1)+aluspd
rijspl=rijspl(-1)+rijspd
kofspl=kofspl(-1)+kofspd
suispl=suispl(-1)+suispd
bacspl=bacspl(-1)+bacspd
garspl=(garspl(-1)+garspd)*(jaar>=1974)+garwpl*(jaar<1974)
houspl=houspl(-1)+houspd
trispl=trispl(-1)+trispd
@De micro prijs/kostenquotes:
baupkql=bauspl -log(0.50*(mepi+0.5*(mpi-mepi)*(JAAR>1987))
*(1+tmwn/mwn)+0.50*(hpepwi+hpepwi(-1))/2)+log(1-levyq)
rijpkql=rijspl-log(0.66*(mepi+0.5*(mpi-
mepi)*(JAAR>1987))*(1+tmwn/mwn)+0.33*(hpepwi+hpepwi(-1))/2)
kofpkql=kofspl-log(0.20*(mepi+0.5*(JAAR>1987)) *(1+tmwn/mwn)
+0.80*(hpepwi+hpepwi(-1))/2)
suipkql=suispl-log(0.20*(mepi+0.5*(mpi-mepi)*(JAAR>1987))
*(1+tmwn/mwn)+0.80*(hpepwi+hpepwi(-1))/2)
bacpkql=bacspl-log(0.60*(mepi+0.5*(mpi-mepi)*(JAAR>1987))
*(1+tmwn/mwn)+0.40*(hpepwi+hpepwi(-1))/2)
garpkql=garspl-log(0.80*(mepi+0.5*(mpi-mepi)*(JAAR>1987))
*(1+tmwn/mwn)+0.20*(hpepwi+hpepwi(-1))/2)
houpkql=houspl-log(0.30*(mepi+0.5*(mpi-mepi)*(JAAR>1987))
*(1+tmwn/mwn)+0.70*(hpepwi+hpepwi(-1))/2)
ho3pkql=(houpkql+houpkql(-1)+houpkql(-2))/3
tripkql=trispl-log(0.30*(mepi+0.5*(mpi-mepi)*(JAAR>1987))
*(1+tmwn/mwn)+0.70*(hpepwi+hpepwi(-1))/2)
baupkqd=baupkql-baupkql(-1)
garpkqd=garpkql-garpkql(-1)
ho3pkqd=ho3pkql-ho3pkql(-1)
tripkqd=tripkql-tripkql(-1)

@De micro production equations:

BAUCEMND=-2.595655D-02+.9900082*BAUPKQD-.4413898*ZBAU(-1)
baucemnl=baucemnl(-1)+baucemnd
ALAEMND=3.552931D-03+.9988618*(ALACAP-ALACAP(-1))-.4110613*ZALA(-
1)
alaemnl=alaemnl(-1)+alaemnd
ALUEMND=-3.231307D-03+.9558937*(ALUCAP-ALUCAP(-1))-1.075233*ZALU(-
1)
aluemnl=aluemnl(-1)+aluemnd
rijhnl=rijhnl(-1) +(0.045+dr)*(rijpkql > -6.2)
rijhnd=rijhnl-rijhnl(-1)
RIJCEDND=3.161478D-02+.4758778*RIJHND-.7647778*ZRIJ(-1)
rijcednl=rijcednl(-1)+rijcednd
kofhnl=log((exp(kofhnl(-1))-103*(kofpkql <-3.1)) *((exp(kofhnl(-
1))-103*(kofpkql < -3.1)) >0) + 0.0001)
KOFPTNL=-1.404485+.9947258*KOFHNL
KOF=.2319478+1.38531*LOG((exp(kofptnl)/1000-0.089)
*((exp(kofptnl)/1000-0.089)>0)+0.0001)
KOFEDNL=KOF*(KOF> -5.7) -9.9*(kof<=-5.7)
SUIEDND=(1.570698D-02+1.943561*SUIHND(-1)-1.00017*ZSUI(-1))
*(JAAR<1973)
suiednl=(suiednl(-1)+suiednd) -9.9*(JAAR>1972)
bachn= bachn*(JAAR<1969) +  (JAAR>1968)*(bachn(-1)
*(1+0.045*(bacpkql>-6.5))   +3000*(JAAR>1991)*(JAAR<2002)  )
dbachnl=log(dbac*bachn)
BACEDNL=-4.206549+1.036055*DBACHNL
GAREDND=7.245112D-02+.3337107*GARPKQD(-1)-.4743364*ZGAR(-1)
garednl=garednl(-1)+garednd
HOUEKND=-4.823705D-02+.1834181*HO3PKQD-.3783534*ZHOU(-1)
houeknl=houeknl(-1)+houeknd
TRIEKND=(-0.06+1.00*TRIPKQD(-1)-.33*ZTRI(-1)) *(jaar>1963)+(dtri-
dtri(-1))*(jaar<=1963)
trieknl=trieknl(-1)+trieknd
TOEVN=-2.296433+.1383853*(MIGAN(-3) +1*(JAAR>1993))
+.1730582*(MIGAN(-4)+1*(JAAR>1994))+.1194897*(MIGAN(-5)
+1*(JAAR>1995))+4.984067D-02*(MITAN(-6) +1*(JAAR>1996))
+.1008706*RVBVN-14.64754*(JAAR=1982)*0.5 -14.64754*(JAAR>1982)
*(JAAR<1990) -10*(JAAR=1990)  -5*(JAAR=1991)
rijcdn=rijcdn*(JAAR<1988) +(JAAR>1987)*BEVAN(-1)*.112

@The micro export equation:

BMWN=+(exp(baucemnl)+dbau)*exp(bauspl)+exp(alaemnl)*exp(alaspl)
+exp(aluemnl)*exp(aluspl)+(exp(rijcednl)-rijcdn)
*exp(rijspl)+exp(kofednl)*exp(kofspl) +exp(suiednl) *exp(suispl)
+exp(bacednl)*exp(bacspl) +exp(garednl) *exp(garspl)
+exp(houeknl)*exp(houspl) +exp(trieknl)
*exp(trispl)+toevn*CGPI/100
bmwp=(bmwn/bmwn(-1)-1)*100
bmwpq=bmwp*bmbq(-1)

@The micro investment equations:

rijc=exp(rijhnl(-1))*(exp(rijhnl(-1))>=exp(rijhnl(-2)))
+exp(rijhnl(-2))*(exp(rijhnl(-2))>exp(rijhnl(-1)))
kofc=exp(kofhnl(-1))*(exp(kofhnl(-1))>=exp(kofhnl(-2)))
+exp(kofhnl(-2))*(exp(kofhnl(-2))>exp(kofhnl(-1)))
suic=exp(suihnl(-1))*(exp(suihnl(-1))>=exp(suihnl(-2)))
+exp(suihnl(-2))*(exp(suihnl(-2))>exp(suihnl(-1)))
rijchd=(exp(rijhnl)-rijc)*((exp(rijhnl)-rijc)>0)
kofchd=(exp(kofhnl)-kofc)*((exp(kofhnl)-kofc)>0)
suichd=(exp(suihnl)-suic)*((exp(suihnl)-suic)>0)
IBMWN=(IPI/100)*d8587*( (exp(baucemnl) +dbau + 2.5*exp(alaemnl)
+5*exp(aluemnl))*23.2*0.29 +BROKOP +rijchd*0.0045*0.666666
+(exp(rijcednl)-rijcdn)*0.463*0.08 +kofchd*0.0067 +
0.08*1.512*exp(kofednl) + suichd*0.0089 +0.08*0.520*exp(suiednl)
+0.08*0.126*exp(bacednl) +exp(garednl)*0.15
+exp(houeknl)*0.08*0.063 +0.08*0.286*
exp(trieknl) +0.06*toevn+0.12*(toevn-toevn(-1))*((toevn-toevn(-
1))>0) )  -5*(JAAR=1955)
ibmwp=(ibmwn/ibmwn(-1)-1)*100
ibmwpq=ibmq(-1)*(ibmwn/ibmwn(-1)-1)*100

@The MACRO BLOCK:

@The macro behavioural equations:

BWP=1.116923*BMWPQ+.8198514 +10*(JAAR=1956)-10*(JAAR=1957)-
20*(JAAR=1958)+20*(JAAR=1959)+15*(JAAR=1987) -15*(JAAR=1988)
BPP=((    +(exp(baucemnl(-1))+dbau(-1)) *exp(bauspl)
+exp(alaemnl(-1))*exp(alaspl)+exp(aluemnl(-1))*exp(aluspl)
+(exp(rijcednl(-1))-rijcdn(-1))*exp(rijspl) +exp(kofednl(-1))
*exp(kofspl) +exp(suiednl(-1))*exp(suispl) +exp(bacednl(-1))
*exp(bacspl)+exp(garednl(-1))*exp(garspl) +exp(houeknl(-1))
*exp(houspl)+exp(trieknl(-1))*exp(trispl) +toevn(-1)*CGPI/100)
/BMWN(-1)  -1)*100
IBWP=-7.09 +0.877*IBMWPQ+1.066*YIWP2+60*(JAAR=1974)-60*(JAAR=1976)
+30*(JAAR=1980)+30*(JAAR=1981)-30*(JAAR=1982)-30*(JAAR=1983)
CGWP= ( -1.32+96.30*LBESQW+58.88*(ZBESQW+ZBESQW(-1))/2
+13.6*(JAAR=1967)-13.6*(JAAR=1974)-6.8*(JAAR=1975)
+6.8*(JAAR=1976) +10*(JAAR=1977) -6.8*(JAAR=1980)-
6.8*(JAAR=1981)+.241*(LIQWP-BBPMWP)   )*(JAAR<1985)  +
(JAAR>1984)*((1+cgpp/100)*(1+(+0.91+0.65*(MVP*.75+MVP(-1) *.25)-
0.55*(CGMPP(-1)+CGMPP(-2))/2 -15*(JAAR=1986) -
15*(JAAR=1987))/100)-1)*100
MVP=(  .794 +1.018*VHMVP +.422*CGMPP)*(JAAR<1985)
+10*(JAAR=1959)+10*(JAAR=1960) -10*(JAAR=1964)
+((1+mewp/100)/(1+mepp/100)-1)*100*(JAAR>1984)
ABAP=1.321+.1555*VA(-1)-.0986*WWQD -2*(JAAR<1968)*(JAAR>1960)
WWQD=.383-.416*ABAP+.294*POTBAP
LBABPP=   (8.1+.75*DPC-.87*WWQD )*(.10 +.25*(WWQN<22)
+.65*(WWQN<25.3) +.50*(JAAR>1988)*(WWQN>25.3) )*(    (
(8.1+.75*DPC-.87*WWQD )*(.10 +.25*(WWQN<22) +.65*(WWQN<25.3)
+.50*(JAAR>1988)*(WWQN>25.3) ) ) >0 ) +dl  +5*(JAAR=1976)
+5*(JAAR=1977)
IPP=4.468+.6649*HPMI-9.512*(JAAR>1978)*(JAAR<1985) -8*(JAAR=1963)
-8*(JAAR=1964) +(tkq-tkq(-1)) +0.25*LIQWP(-1) *(JAAR>1987)
CGPP1=-5.88+(.770+0.25*.770*(JAAR>1984))*HPMC-.221*YBVP(-1)
+.307*LIQWP+.353*LIQWP(-1)+(tkq-tkq(-1))  +10*(JAAR=1955)  -
20*(JAAR=1974)  +4.4*(JAAR>1994)
CGPP=CGPP1 -0.75*CGPP1*(CGPP1<0)
LIQWP=    6.68+.379*FINWD+.434*RESWD  -9.5*(JAAR=1962)
+9.5*(JAAR=1963)+17.6*(JAAR=1985)+17.6*(JAAR=1986) -13*(JAAR=1955)
-8*(JAAR=1958) +10*(JAAR=1965) -
(JAAR>1988)*(JAAR<1991)*0.25*100*445/liqwn(-1)

@The exchange rate block:

MPP= MEPP +(JAAR>1984)*( -.221*ybvp(-1) +0.307*liqwp +.353*liqwp(-
1) )   -15*(JAAR=1985)  -13*(JAAR=1986)  +15*(JAAR=1987)
+(JAAR>1986)*25*log(   ( LIQWN/(YBWN+MWN-MEWN) )/( (LIQWN(-
1)/(YBWN(-1)+MWN(-1)-MEWN(-1) ) +.30)/2 ) )
MEWN= MWN*(JAAR<1985) + ( 0.75*(BWN+LEGWN+ZEBWN+OEGWN-LBEWN-ZBEWN-
ZOEWN-OGEWN-OOEWN+KTEWN +KNEOWN+MIDWN+KEBWN+KEOWN-GOUWN)+
0.25*(BWN(-1)+LEGWN(-1)+ZEBWN(-1)+OEGWN(-1)-LBEWN(-1)-ZBEWN(-1)-
ZOEWN(-1)-OGEWN(-1)-OOEWN(-1)+KTEWN(-1)+KNEOWN(-1)+MIDWN(-
1)+KEBWN(-1)+KEOWN(-1)-GOUWN(-1) ) )*(JAAR>1984) + 0.5*(DEVWN(-1)-
0.5*DEVWN(-2)+30)*(JAAR>1989)
MEWP=(MEWN/MEWN(-1)-1)*100
PKRSQ= 1 +(JAAR>1984)*((MWN-MEWN)/(EAWN+0.00000001))
GKRSQ=MWN/MEWN

@The macro definition equations:
FINWD=(MOOWN/LIQWN(-1))*100
MITAN=MITAN(-1)+MIGAN
cgpi=cgpi(-1)*(1+cgpp/100)
ipi=ipi(-1)*(1+ipp/100)
bpi=bpi(-1)*(1+bpp/100)
mpi=mpi(-1)*(1+mpp/100)
mepi=mepi(-1)*(1+mepp/100)
cgvp=((1+cgwp/100)/(1+cgpp/100)-1)*100
ibvp=((1+ibwp/100)/(1+ipp/100)-1)*100
lbwp=((1+abap/100)*(1+lbabpp/100)-1)*100
bvp=((1+bwp/100)/(1+bpp/100)-1)*100
mwp=((1+mvp/100)*(1+mpp/100)-1)*100
vwp=cgvq(-1)*cgwp+cmovq(-1)*cmowp+lovq(-1)*lowp+iovq(-1)
*iowp+bvq(-1)*bwp+ibvq(-1)*ibwp
bbpmwp=vbq(-1)*vwp-mbq(-1)*mwp
yiwp=vyiq(-1)*vwp-lyiq(-1)*lowp-byiq(-1)*bwp
yiwp2=(yiwp+yiwp(-1))/2
vvlbwp=vvbq(-1)*vwp-lovbq(-1)*lowp
ybwp=bybq(-1)*bbpmwp-loybq(-1)*lowp
vvp=cgvq(-1)*cgvp+cmovq(-1)*cmovp+lovq(-1)*aoap+iovq(-1)
*iovp+bvq(-1)*bvp+ibvq(-1)*ibvp
bbpmvp=vbq(-1)*vvp-mbq(-1)*mvp
yivp=vyiq(-1)*vvp-lyiq(-1)*aoap-byiq(-1)*bvp
vhmvn=-(exp(alaemnl)*118.776 +exp(aluemnl)*821.033)*0.16
+bwn*0.32/(bpi/100) +(cmown*0.48+cgwn*0.47)/(cgpi/100)
+(iown*0.43+ibwn*0.54)/(ipi/100)
ybvp=bybq(-1)*bbpmvp -loybq(-1)*aoap
vhmvp=(vhmvn/vhmvn(-1)-1)*100
vhmwn=-(exp(alaemnl)*exp(alaspl)
+exp(aluemnl)*exp(aluspl))*0.16+bwn*0.32+cmown*0.48+cgwn*0.47+iown
*0.43+ibwn*0.54
vhmwp=(vhmwn/vhmwn(-1)-1)*100
vhavn=-(exp(alaemnl)*118.776+exp(aluemnl)*821.033)*88.4
+bwn*88.4/(bpi/100)+(cmown*83.0+cgwn*79.0)/ (cgpi/100)+(iown*77.0
+ibwn*45.0)/(ipi/100)
aban=aban(-1)*(1+abap/100)
va=((((1-0.25*(hpepwi(-1)/mpi(-1)-1))*vhavn/1000)/(ta/100)-
aban)/aban)*100
tkswp=(tkswn/tkswn(-1)-1)*100
elwn=legwn-lbewn+oegwn-ogewn+oogwn-ogown
ezwn=-zbewn-zbown-tdbwn+zobwn+zebwn
elwp=(elwn/elwn(-1)-1)*100
ezwp=(ezwn/ezwn(-1)-1)*100
lbesbwp=lblbesq(-1)*lbwp+lolbesq(-1)*lowp+elbesq(-1)*elwp
zbesbwp=ybzbesq(-1)*ybwp-tkszbesq(-1)*tkswp-ezbesq(-1)*ezwp-
lbzbesq(-1)*lbwp
lbesnwp=(tdgq/tdgq(-1))*lbesbwp+(tdgq/tdgq(-1))-1
zbesnwp=(tdgq/tdgq(-1))*zbesbwp+(tdgq/tdgq(-1))-1
lbesqw=lbescq(-1)*lbesnwp/100
zbesqw=zbescq(-1)*zbesnwp/100
rvblp=(((1+lbesnwp/100)/(1+cgpp/100))-1)*100
LOQ=100*LBESBWN*lblbesq/(BBPMWN-LOWN-TKSWN-DBWN)
dpc=(JAAR<1972)*(cgpp(-1)+cgpp(-2))/2 +(JAAR=1972)*cgpp
+(JAAR=1973)*cgpp+(JAAR>1973)*cgpp(-1)
hpepwp=((1+lbabpp/100)*(1+abap/100)/(1+ybvp/100)-1)*100
hpepwi=hpepwi(-1)*(1+hpepwp/100)
pbavp=((1+ybvp/100)/(1+abap/100)-1)*100
cgmpp=((1+cgpp/100)/(1+(mpp +(TMWN/MWN-TMWN(-1)/MWN(-1))*100
+(.16666*(mpp  +(TMWN/MWN-TMWN(-1)/MWN(-1))*100    )-
.16666*mepp)*(JAAR>1987))/100)-1)*100
hpmi= hpepwp*.46*(1 -MWN(-1)/(BWN(-1)+CGWN(-1)+IBWN(-1) +CMOWN(-
1)+IOWN(-1)))/.61  +(mpp+(.1666*mpp-.166666*mepp)*(JAAR>1987))*(1
-.46*(1 -MWN(-1)/(BWN(-1) +CGWN(-1)+IBWN(-1)+CMOWN(-1)+IOWN(-
1)))/.61 )
hpmc= hpepwp*.27*(1 -MWN(-1)/(BWN(-1)+CGWN(-1)+IBWN(-1) +CMOWN(-
1)+IOWN(-1)))/.61  +(mpp+(.16666*mpp-.166666*mepp)*(JAAR>1987))*(1
-.27*(1 -MWN(-1)/(BWN(-1) +CGWN(-1)+IBWN(-1)+CMOWN(-1)+IOWN(-
1)))/.61 )
IBWN=IBWN(-1)*(1+ibwp/100)
BWN=BWN(-1)*(1+bwp/100)
MWN=MWN(-1)*(1+mvp/100)*(1+mpp/100)
CGWN=CGWN(-1)*(1+cgwp/100)
ZBESBWN=ZBESBWN(-1)*(1+zbesbwp/100)
LBESBWN=LBESBWN(-1)*(1+lbesbwp/100)
BBPMWN=CMOWN+LOWN+CGWN+IBWN+IOWN+BWN-MWN
YBWN=CMOWN+CGWN+IBWN+IOWN+BWN-MWN
tdgq=(ZBESBWN+LBESBWN-TDGWN)/(ZBESBWN+LBESBWN)
tkq=100*(tkswn-tbauwn-tblwn)/(cmown+cgwn+iown+ibwn)
LIQWN=LIQWN(-1)*(1+liqwp/100)
WWQN=WWQN(-1) +WWQD
LBABWN=LBABWN(-1)*(1+lbabpp/100)*(1+abap/100)
belq=((tkswn+tdbwn+tdgwn+ogown)/bbpmwn)*100
sdlrwd=((bwn+legwn+zebwn+oegwn-mewn-lbewn-zbewn-zoewn-ogewn-
ooewn+ktewn )/liqwn(-1))*100
nbeswp=((zbesbwn+lbesbwn-tdgwn-tdbwn)/(zbesbwn(-1)+lbesbwn(-1) -
tdgwn(-1)-tdbwn(-1))-1)*100
DEVWN=DEVWN(-1) +BWN+LEGWN+ZEBWN+OEGWN-MEWN-LBEWN-ZBEWN-ZOEWN-
OGEWN-OOEWN+KTEWN  +KNEOWN+MIDWN+KEBWN+KEOWN-GOUWN

@The macro shares:

lblbesq=lblbesq(-1)*(1+lbwp/100)/(1+lbesbwp/100)
lolbesq=lolbesq(-1)*(1+lowp/100)/(1+lbesbwp/100)
elbesq=elbesq(-1)*(1+elwp/100)/(1+lbesbwp/100)
ybzbesq=ybzbesq(-1)*(1+ybwp/100)/(1+zbesbwp/100)
tkszbesq=tkszbesq(-1)*(1+tkswp/100)/(1+zbesbwp/100)
lbzbesq=lbzbesq(-1)*(1+lbwp/100)/(1+zbesbwp/100)
ezbesq=ezbesq(-1)*(1+ezwp/100)/(1+zbesbwp/100)
lbescq=lbescq(-1)*(1+lbesnwp/100)/(1+cgwp/100)
zbescq=zbescq(-1)*(1+zbesnwp/100)/(1+cgwp/100)
cgvq=cgvq(-1)*(1+cgwp/100)/(1+vwp/100)
cmovq=cmovq(-1)*(1+cmowp/100)/(1+vwp/100)
lovq=lovq(-1)*(1+lowp/100)/(1+vwp/100)
iovq=iovq(-1)*(1+iowp/100)/(1+vwp/100)
ibvq=ibvq(-1)*(1+ibwp/100)/(1+vwp/100)
bvq=bvq(-1)*(1+bwp/100)/(1+vwp/100)
vbq=vbq(-1)*(1+vwp/100)/(1+bbpmwp/100)
mbq=mbq(-1)*(1+mwp/100)/(1+bbpmwp/100)
vyiq=vyiq(-1)*(1+vwp/100)/(1+yiwp/100)
lyiq=lyiq(-1)*(1+lowp/100)/(1+yiwp/100)
byiq=byiq(-1)*(1+bwp/100)/(1+yiwp/100)
vvbq=vvbq(-1)*(1+vwp/100)/(1+vvlbwp/100)
lovbq=lovbq(-1)*(1+lowp/100)/(1+vvlbwp/100)
bybq=bybq(-1)*(1+bbpmwp/100)/(1+ybwp/100)
loybq=loybq(-1)*(1+lowp/100)/(1+ybwp/100)
bmbq=bmbq(-1)*(1+bmwp/100)/(1+bwp/100)
ibmq= 1 + (-1 +ibmq(-1)*(1+ibmwp/100)/(1+ibwp/100) )*( (ibmq(-
1)*(1+ibmwp/100)/(1+ibwp/100))<1)

@Te semi-behavioural equations:

BVWN=BVWN(-1)*(1-0.09)*(1+0.25*ipp/100)+IBWN
DBWN=0.09*BVWN

@The balance of payments equations:

reswd=100*(devwn-devwn(-1)+gouwn)/liqwn(-1)
ZEBWN= -1.62 + 1.34*USAR(-1)/100*(DEVWN+DEVWN(-1))/2
KEBWN=-15.0+.294*(54/(JAAR-1900))*IBWN/GKRSQ  +9*(JAAR<1959)
+23*(JAAR>1958)*(JAAR<1962) +42*(JAAR=1962) +42*(JAAR=1963)
+56*(JAAR=1964)+56*(JAAR=1965) -8*(JAAR=1970) +56*(JAAR=1975)-
56*(JAAR=1976)-56*(JAAR=1977)-56*(JAAR=1978)-56*(JAAR=1979)-
56*(JAAR=1986)-56*(JAAR=1987) -20*(JAAR=1971) -140*(JAAR=1988) -
140*(JAAR=1989)
EKAP=EKAP(-1)+KEBWN
ZBEWN=  -10*(JAAR=1955) +15*(JAAR=1959) +15*(JAAR=1960)  +(
9.7+0.59*EKAP*(ZBESBWN/BVWN+ZBESBWN(-1)/BVWN(-1))/2
+39.6*(JAAR>1968)*(JAAR<1973)-39.6*(JAAR=1981)-39.6*(JAAR>1983)  -
15*(JAAR>1964)*(JAAR<1968) )/GKRSQ

@The government block:

ZBOWN= 7.67 + 1.01*ZOBWN(-1) + 0.69*ZEBWN(-1) -6*(JAAR<1958)  -
5*(JAAR=1965)  +9*(JAAR=1972) +12*(JAAR=1973)
TBAUWN= 0.55*(exp(BAUCEMNL) +DBAU +2.5*exp(ALAEMNL)
+5*exp(ALUEMNL))-0.054*JAAR +107.1
TMWN= 5.13 + (0.13+(JAAR>1989)*0.02)*MWN  +5*(JAAR=1974) -
3*(JAAR<1960)
TCWN= 0.54 +(0.03+(JAAR>1987)*0.02+(JAAR>1989)*0.005)*CGWN
TBLWN=LEVYQ*(exp(baucemnl)+dbau+2.5*exp(ALAEMNL)
+5*exp(ALUEMNL))*exp(BAUSPL)
TDBWN= 1.95 +0.19*(1+0.33*(JAAR>1982))*(ZBESBWN(-1)+TDBWN(-1)) -
3*(JAAR<1957) -10*(JAAR=1968) +10*(JAAR=1972) -30*(JAAR=1975) -
20*(JAAR=1979) -10*(JAAR=1982) -15*(JAAR=1983) +45*(JAAR=1984)
+45*(JAAR=1985) +45*(JAAR=1986) -50*(JAAR>1989)*(JAAR<1995)
LOWN= AOAN*( 1.36 +0.61*LBABWN -0.5*(JAAR<1961) +0.2*(JAAR<1973) -
1.0*(JAAR>1977)*(JAAR<1981) +1.0*(JAAR=1982) +0.7*(JAAR=1983)
+1.0*(JAAR>1986) )*(JAAR<1988) +(JAAR>1987)*LOWN(-1)*(AOAN/AOAN(-
1))*(1+lbabpp(-1)/100)
TDGWN= 0.68 +(0.04+(JAAR>1989)*0.01)*(ZBESBWN(-1)+LBESBWN(-1)) -
8.7*(JAAR=1982) -8.7*(JAAR=1983) +8.7*(JAAR=1984) +8.7*(JAAR=1985)
IOWN= ( -1.03 + 0.97*(KNEOWN+MIDWN) +0.66*IOWN(-1)
*((KNEOWN+MIDWN)<5)*(JAAR>1982) -30*(JAAR=1976) )*GKRSQ -
10*(JAAR=1963) -5*(JAAR=1964) -5*(JAAR=1965)
ZOBWN= -0.50 +0.40*(SURR/100)*(SOBWN -445*(JAAR>1988) -
445*(JAAR>1989) ) +.06*445*(JAAR>1988)  +.06*445*(JAAR>1989)
ZOEWN= (0.19 +0.007*SOEWN)*(JAAR<=1976) +(-0.34
+0.55*SOEWN*USAR/100)*(JAAR>1976)
TKSWN= 1.013*(TBAUWN+TMWN+TCWN+TBLWN)+1.22 -SUBWN
CMOWN=  (  (3.71 + 0.985*(OBESWN-LOWN) +0.20*(DEVWN(-1)-DEVWN(-
2)+GOUWN(-1)) )*(JAAR<1983) +4*(JAAR=1955)
+7*(JAAR>1961)*(JAAR<1965) -10*(JAAR=1972)  +15*(JAAR=1976)
+45*(JAAR=1977) -15*(JAAR=1978) -15*(JAAR=1979) -30*(JAAR=1980)
+30*(JAAR=1981) +80*(JAAR=1982) +dcmown  )*(JAAR<1988)
+(JAAR>1987)*cmown(-1)*(1 +0.12*(JAAR<1991)+(JAAR>1990)*cgpp(-
1)/100 ) -(JAAR>1987)*(MOOWN(-1)<0)*MOOWN(-1)
OBESWN= ZBOWN+TKSWN+TDBWN+TDGWN+OGOWN-ZOBWN-ZOEWN-OOGWN-
OOEWN+KASTWN
MOOWN=-OBESWN+LOWN+CMOWN+IOWN-KNEOWN-MIDWN-KBOWN-KEOWN
SOBWN= SOBWN(-1) +KBOWN +MOOWN
SOEWN= SOEWN(-1) +MIDWN + KEOWN -210*(JAAR=1975)
SURR= 6.64 + 0.31*(USAR+USAR(-1)+USAR(-2)+USAR(-3))/4
cmowp=(cmown/cmown(-1)-1)*100
cmovp=((1+cmowp/100)/(1+cgpp/100)-1)*100
iowp=(iown/iown(-1)-1)*100
iovp=((1+iowp/100)/(1+ipp/100)-1)*100
aoap=(aoan/aoan(-1)-1)*100
lowp=(lown/lown(-1)-1)*100
ABAN=ABAN(-1)*(1+ABAP/100)
MIGAN=MIGAN*(JAAR<1990) +(JAAR>1989)*(+0.05*(WWQN(-1)/100-
.10)*BEVAN(-1) -1)
BEVAN=RIJCDN/(.086223175*1.008^(JAAR-1954))*(JAAR<1988) +
(JAAR>1987)*(1.02*BEVAN(-1)-MIGAN)
B1664N= 221.8*(JAAR=1988) +(JAAR>1988)*B1664N(-1) *(1+B1664P/100 -
(MIGAN+1)/BEVAN(-1)  )
POTBAP=POTBAP*(JAAR<1988)    +(JAAR>1987)*( (B1664N-
AOAN)/(B1664N(-1)-AOAN(-1) ) -1)*100

@End
Appendix  Alfabetic List of the Variables.

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"A Macro Model for a Small Economy
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