The Reserve Bank of Australia has revealed how it operates its new “macroeconometric” model of the economy, a large-scale model that differs from many of those in use at other central banks.

“Martin” – or Macroeconomic Relationships for Targeting Inflation – consists of a series of estimated equations that match the forecasting process at the central bank. It is used for both forecasting and scenario analysis.

The model is much less strict in its theoretical structure than the main models in