ABSTRACT

The macro-econometric model is developed from the econometric approach and verified by historical data. This chapter examines the parameter manipulation methods by referring to the compilation and application of the Shanxi econometric model. The Shanxi econometric model adopts the production function with net output value. The demand for labor force by each material production sector will considerably exceed the total labor available by the end of the 20th century in the given value of fixed assets investment based on the prediction for the next 20 years through Formula. The Shanxi econometric model consists of over 30 sub-models. In addition to the sub-models of net output value, total output value, labor demand and supply and production fixed assets, there are sub-models of local revenue and expenditure, urban and rural residents' income and expenditure, ultimate supply and demand of products, movements of products, and non-material production sector.