Practical Model-Based Monetary Policy Analysis--A How-To Guide

 
Author/Editor: Berg, Andrew ; Laxton, Douglas ; Karam, Philippe D
 
Publication Date: March 01, 2006
 
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Disclaimer: This Working Paper should not be reported as representing the views of the IMF. The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate
 
Summary: This paper provides a how-to guide to model-based forecasting and monetary policy analysis. It describes a simple structural model, along the lines of those in use in a number of central banks. This workhorse model consists of an aggregate demand (or IS) curve, a price-setting (or Phillips) curve, a version of the uncovered interest parity condition, and a monetary policy reaction function. The paper discusses how to parameterize the model and use it for forecasting and policy analysis, illustrating with an application to Canada. It also introduces a set of useful software tools for conducting a model-consistent forecast.
 
Series: Working Paper No. 06/81
Subject(s): Monetary policy | Canada | United States | Monetary aggregates | Forecasting models | Economic models

Author's Keyword(s): Monetary Policy | Forecasting and Simulation | Model construction and estimation | computational techniques
 
English
Publication Date: March 01, 2006
ISBN/ISSN: 0 / 1934-7073 Format: Paper
Stock No: WPIEA2006081 Pages: 69
Price:
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