Equations across the Border: RDX2 Meets MPS
| Date | 01 June 1972 |
| DOI | 10.1177/002070207202700205 |
| Author | Ian A. Stewart,John F. Helliwell,Tom Maxwell,Fred W. Gorbet |
| Published date | 01 June 1972 |
| Subject Matter | Article |
JOHN
F.
HELLIWELL
IAN
A.
STEWART
FRED
W.
GORBET
TOM
MAXWELL
Equations
across
the
border:
RDX2
meets
MPS
The
separate
but
highly
interdependent
economies
of
Canada
and
the
United
States
provide
unequalled opportunities
for
the
model-
ling
and
simulation
of
international
economic
relations.
This
paper
outlines
a
project
designed
to take
advantage
of
these
oppor-
tunities.'
There
are
three
key
features
of
Canada-United
States
economic
relations
that jointly
serve
to
provide
both
the
purpose and
the
necessary
materials
for
simulating
the
international
effects
of
each
country's
policies.
First, the
economic
ties
between
the
two
coun-
tries
are
substantial
enough
to
be
important
to
both.
Trade
flows
are larger
than
between
any
other
two
countries, and
ownership
and
lending
ties
are
equally
pervasive.
Of
the
1968
Canadian
business
capital
stock
not
owned
by
government
enterprises,
about
66
per
cent
was
financed
by
foreign
direct
and
portfolio
investment,
8o
per
cent
of
which
came
from
the
United
States.
Secondly,
the
national
accounts, balance
of
payments,
labour
force,
and
other
statistics
are solid
enough
to
have
permitted
the construction
of
separate
but
fairly
compatible
aggregate
quarterly
models of
Canada
(uxD2)
2
and
the
United
States
(MPS).
3
Thirdly,
the
two
countries
are
Department
of
Economics,
University
of
British Columbia
(Helliwell
and
Maxwell),
and
Research
Department,
Bank of
Canada
(Stewart
and
Gorbet).
i
The
project
is
described
more
fully
in
J.F.
Helliwell,
H.T.
Shapiro,
G.R.
Sparks,
I.A.
Stewart,
and
F.W.
Gorbet:
"Comprehensive Linkage of
Large
Models:
Canada
and
the
United
States,"
in
R.J. Ball,
ed,
International
Linkage
of
National
Economic
Models
(Amsterdam,
North-Holland,
1972).
Funds for
the
project
have
been
generously
provided
by
grants
from
the
I.W.
Killam
fund
administered
by
the
Canada
Council.
2
The
theory
and
structural
equations
of
the
Canadian
model
imxR
are
presented
in
J.F.
Helliwell,
H.T.
Shapiro,
G.R.
Sparks,
I.A.
Stewart,
F.W.
Gorbet,
and
D.R.
Stephenson,
The
Structure
of RDX2,
Bank of
Canada
Staff
Research
Studies
no
7
(Ottawa,
Bank
of
Canada,
1971).
To continue reading
Request your trial