The early development of econometric modeling languages

Abstract

This article considers certain salient aspects of the development of software specifically created in order to support the construction, maintenance and use of macroeconometric models. As a type, the individual packages are commonly classified as econometric modeling languages. This nomenclature reflects that the command structures used to operate this software are language-like in many of their characteristics, particularly in the case of those commands employed to express a model's relationships, state variable transformations, and perform other essentially mathematical or statistical operations. The focus of this article is both the evolution of language structure, as an expression of the process of creating and using econometric models, and the concomitant increased degree of functional integration that has accompanied it.

Econometric Software

“…Other economists, including Charles Bischoff, Ray Fair, Robert Gordon, and Richard Sutch, each wrote specific TSP subroutines or incorporated particular econometric techniques. These pre-1969 versions of TSP also included the first vestiges of a symbolic language interface [203]. With a few exceptions -such as MODLER [209] and TROLL [63] -until the later 1970s the operation of other programs of all types was commonly controlled by numbers, letters, and labels located in fixed fields on punched cards or paper tapes.…”

“…On the one hand, at the end of the 1960s, the first econometric modeling languages [203] began to be written, in order to support the creation, maintenance, and use of large macroeconometric models. The creation of multi-hundred equation models, such as the Brookings and Wharton models in the USA, the Candide model in Canada, the Cambridge growth model in the UK, and others elsewhere [31], implied the need to manage time-series databases containing thousands of variables, to create model solution algorithms [197,216], and to develop graphical, tabular, and other easily understood display facilities.…”

“…Optimized solutions, particularly in the context of rational expectations or model-consistent solutions, add a further level of complexity to the solution process [75,76,78]. All these solution techniques are more difficult to implement accurately than is generally recognized, with a number of potential pitfalls [173]; however, the numerical accuracy of model solution software has seldom been tested [203].…”

“…However, 25 years later, at least in the case of the major industrialized countries, each of the recessions that had occurred had proved to be of short duration and at worst represented small fluctuations about a distinctly upward trend. One of the consequences, in 1970, was substantial forthcoming corporate and government support for the creation of economic consulting firms, such as Data Resources, Chase, and Wharton, each of which began to create and support large-scale, computer-resident economic databases and econometric software systems [203,206].…”

“…As a result, at the beginning of the 1980s, economists were ready to adopt the then emerging microcomputer and, by the middle of that decade, had begun to use it as the primary locus for analytical processing, including by 1985 the solution of econometric models of 600 and more equations [209]. However, it was only in late 1984 that it began to become common for econometric models to be mounted on more than a single computer [203].…”