MAS Launches New Macroeconometeric Model to Forecast Economic Trends
Singapore, 2 Feb 2000...The Monetary Authority of Singapore (MAS) today unveiled its new macroeconometric model of the Singapore economy, the Monetary Model of Singapore (MMS).
2 The MMS incorporates the latest advances and innovations in structural modelling such as well-defined long run properties, rational expectations in financial markets, and detailed modeling of production in different sectors.
3 Prior to the MMS, the Economics Department of the MAS used the SINGMOD model, which was built in 1989, to analyse exchange rate policies and their impact on the Singapore economy.
4 "Macro models play an important role in policy-making. First, they are the principal tools for exchange rate policy analysis. Second, they are used to forecast key economic variables. These forecasts serve as inputs into our exchange rate policy reviews and medium-term planning scenarios. Finally, these models are used to analyse a wide range of policy issues," noted Dr Khor Hoe Ee, Senior Executive Director, MAS Economics Department.
5 "As the macroeconomic environment changes and advances are made in the field of econometric modeling, we recognise the need for new models in order to better respond to structural changes in the economy. That is why we have developed the MMS." added Dr Khor.
6 However, Dr Khor also highlighted that models, while an indispensable tool for policy analysis and forecasting, cannot replace skilled economic judgements. Also, MAS adopts a pluralist approach in that a number of different models are used rather than just one "flagship" model.
7 The MMS was unveiled at the Conference on Macroeconometric Modelling and Public Policy, which was opened by Minister for Health and Second Minister for Finance, Mr Lim Hng Kiang.