The Forecasting and Policy System: demand-side satellite models

This paper presents three satellite models for the Forecasting and Policy System (FPS). Satellite models are used to disaggregate the projections generated by the core model into a more detailed profile. The household expenditure, exports, and business investment satellite models disaggregate the relevant macroeconomic variables by modelling the shares of each aggregate allocated to each expenditure item. The models are assessed by examining their dynamic properties in response to artificial shocks and their ability to track historical data.