Introducing the MONIAC - an early and innovative economic model
The MONIAC hydraulic computer is an example of a mechanical economic model dating to the 1940s. This article introduces the MONIAC and its creator, New Zealand economist Bill Phillips. Although the MONIAC is not used for policy analysis at the Reserve Bank, large-scale, practical macroeconomic modelling has long been part of our research and policy effort. Our modelling has evolved considerably in the nearly 40 years since macroeconomic modelling was introduced in the Bank, reflecting developments in economic theory and understanding of the New Zealand economy as it changes over time. In no small part, the improvement has been facilitated by the enormous increase in computing power in the decades since MONIAC was developed. The only working MONIAC in the Southern hemisphere is on display in the Reserve Bank Museum, on long-term loan from the New Zealand Institute of Economic Research (NZIER).