Overview of Chickadee: a macroeconomic model for the practitioner.

Summary Macroeconomic models inspired by the Cowles Commission approach have had a remarkable longevity in economic administration. They have withstood the criticisms levelled at them in the literature and have survived the emergence and rise of other macroeconomic analysis tools because of their usefulness to the practitioner. Thanks to the balance they strike between the degree of anchorage to theory and the quality of fit to data, these generalist tools help to shed light on a wide range of questions that arise in operational settings. In addition, modellers have integrated advances in time series econometrics and now use them in combination with complementary analysis tools. Mésange, developed by INSEE and the French Treasury, is a model of this type. It includes some 40 econometrically estimated behavioral equations, for a total of about 500 equations and three modeled branches (manufacturing, non-manufacturing market and non-market). It exists in two versions, with volume data calculated in two different ways by the quarterly national accountants: in volume at constant prices and at chain-linked prices, the latter corresponding to the data published by INSEE since 2007. Two types of use are outlined and illustrated. In the first, the effect of shocks on the economy is studied in the short, medium and long term. The long-term properties of the model must therefore be well known and mastered. This leads to a preference for using the version of the model with constant price volumes. For the second type of use, which focuses on the re-reading of economic forecasts and the analysis of the recent past, it is essential that the model be consistent with the data in the published accounts: in this case, the version of the model with chained prices is used.