The ESRI Medium-Term Economic Model

The purpose of this short article is to give a non-technical introduction to the present revised and extended version of the ESRI medium-term model. While a complete technical description is in preparation and will be published later in the year, we felt that an informal presentation of the model would assist the reader in following the forecasting and analysis contained earlier in the present Review. In section 1.2 we give an overview of the key mechanisms in the model, and follow in Sections 1.3-1.7 with more detailed descriptions of the main sub-sectors: manufacturing, services, and the public sector, and of the labour supply and the expenditure (or absorption) sides of the model. We conclude with an impression of how we think the model provides a guide to the future evolution of the economy and how it helps present starkly some central policy dilemmas.