Working Paper 06-03 - MODTRIM II : A quarterly model for the Belgian economy

Since 1994 the Federal Planning Bureau has been using the annual version of the econometric model modtrim as a central tool to produce its short-term macroeconomic forecasts. At the origin of the project, and as its name indicates, this annual version was meant to be short-lived and quickly replaced by a quarterly version. Unfortunately, the lack of quarterly national accounts prevented from doing so for several years. In 1998, the Institute for National Accounts published official quarterly accounts for the first time and the construction of the quarterly version of the model started in Spring 2000. On that occasion, the opportunity was taken to reassess all behavioural equations of the model. The more limited availability of quarterly data, in comparison with annual data, implied that a more aggregated version of the accounting framework of the yearly model had to be constructed.