The Base Forecast and Model Solution

Unfortunately HM Treasury do not provide a ten year forecast for the UK economy. Indeed, they do not provide any projections of economic variables such as interest rates and exchange rates that might be seen as market sensitive. For this reason the base forecast used by the Virtual Economy model is kindly provided by the National Institute of Economic and Social Research (NIESR). The National Institute has twice won the 'Golden Guru' award for best forecaster in the last three years. A more detailed version and the background to this particular forecast is described in the National Institute Economic Review, January 1999.

The Virtual Economy model solution is calculated using the code obtained from the Fairmodel site. This excellent resource for the economic modeller not only provides solution software but also gives the opportunity to run both US and global models over the Web. While Virtual Economy is aimed at users who want immediate access to the model, the Fairmodel site is exceptionally good for more expert/experienced modellers. Although a considerable investment is required to gain the knowledge needed to use the models, very sophisticated modelling experiments can be undertaken.