Uses of National Economic Models by Federal Agencies

PAD-79-24: Published: May 16, 1979. Publicly Released: May 16, 1979.

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A survey was conducted to examine how federal agencies use large-scale economic models of the United States for formulating national economic policy. Two different questionnaires were used to obtain information on model usage. One questionnaire focused on operations level personnel who used national economic models, and the other focused on policy-level personnel involved in making economic policy decisions. The questionnaire focused on identifying agencies which use national economic forecasting models for economic policy formulation, budget determination, and program development; determining the federal expenditures for using national economic models and the number of employees using these tools; and ascertaining the extent to which forecast results influence economic policy decisions.

The survey indicated that many federal agencies use large-scale economic models of the United States economy, and that users feel these models have a positive impact on decisionmaking. The most frequent use of national economic models is for determining program impact in macroeconomic policy formulation. Regarding staff sizes, agencies reported the equivalent of 83 full-time persons involved with national economic models. One question examined the level of responsibility for model usage. Operations personnel identified the individual most responsible for using economic model outputs. The responses indicate that responsibility is placed at the upper federal gradelevels, primarily at the GS-15 level and above. Most respondents apparently feel that models play a role in the agency decisionmaking process and are reasonably comfortable with the present level of model usage. It appears that models have a positive impact on agencies' decisionmaking. Models have improved and reflected new technology capabilities, innovations in statistical techniques, better understanding of the economic system, and experience gained from using econometric models.

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