In recent years IUI has concentrated much of its research efforts on the development and use of econometric models of the Swedish economy. Although full scale economy-wide models are difficult to estimate and implement, they are essential for analyzing many relevant policy problems. One result of IUIs research in this area is ISAC - a disequilibrium model in the "Keynesian" tradition - which is documented in this book.
The analytical focus of this model is on the testing of theory and the evaluation of policy. The model has been used in evaluating energy policy, fiscal programs, and local government control, as reported in earlier IUI publications. This project has been headed by Professor Bengt-Christer Ysander.
In constructing ISAC and applying it to energy analysis, IUI has collaborated with EFI at the Stockholm School of Economics, particularly with Professor Lars Bergman. His parallel research with the equilibrium model - ELIAS - which is also documented in this volume, represents another, more "classical" tradition in macro model building.
The common purpose of the two models is to capture the various mechanisms by which disturbances and shifts in world markets induce structural adjustment in the small and open Swedish economy. The models are two different analytical tools that have been applied to the same type of problems, and a comparison between them should therefore prove both methodologically and empirically interesting.
