MOSES: Model for studying the economy of Sweden

MOSES is an aggregate econometric model for Sweden, estimated on quarterly data, and intended for policy simulations and short-term forecasting. After a presentation of qualitative model properties, the econometric methodology is summarized. The model properties, within sample simulations, and forecast evaluations are presented. We also address methodology and practical issues relating to building and maintaining a macro model of this type. The detailed econometric equations are reported in Appendix A. “I think it should be generally agreed that a model that does not generate many properties of actual data cannot be claimed to have any ‘policy implications’…” Clive.W. J. Granger (1992, p. 4). ► MOSES is an aggregate macroeconometric model for Sweden for forecasting and policy analysis. ► Model core is wage–price spiral based on wage-bargaining and monopolistic price setting. ► Block structure: wage–price, credit–financial, foreign sector, monetary and fiscal policy. ► Dynamic simultaneous econometric model: cointegration based steady state plus dynamic restrictions.