ABSTRACT

Having fleshed out the different blocks, equations and identities of the ESU01 macroeconometric model in the last six chapters, it is now time to run the full model with its dynamic structure and feedback loops. There are several objectives associated with the exercise. In this chapter, the initial aim is to find a well-behaved solution to the estimated model. Once such a solution is found, the model can be formally evaluated on its ability to mimic the actual workings of the Singapore economy, with its unique structural features, through an examination of the system’s in-sample predictive performance.