DSGE Modeling at the Fund: Applications and Further Developments

By Dennis P Botman, David Rose, Douglas Laxton, Philippe D Karam

August 1, 2007

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Format: Chicago

Dennis P Botman, David Rose, Douglas Laxton, and Philippe D Karam. DSGE Modeling at the Fund: Applications and Further Developments, (USA: International Monetary Fund, 2007) accessed September 18, 2024

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

Researchers in policymaking institutions have expended significant effort to develop a new generation of macro models with more rigorous microfoundations. This paper provides a summary of the applications of two of these models. The Global Economy Model is a quarterly model that features a large assortment of nominal and real rigidities, which are necessary to create plausible short-run dynamics. However, because this model is based on a representative-agent paradigm, its Ricardian features make it unsuitable to study many fiscal policy issues. The Global Fiscal Model, which is an annual model that uses an overlappinggenerations structure, has been designed to analyze the longer-term consequences of alternative fiscal policies.

Subject: Consumption, Fiscal policy, Labor, Real exchange rates, Real interest rates

Keywords: Aggregate demand, Crowding out, Labor market, Open economy, Personal income, Product market, WP

Publication Details

Pages:

41
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2007/200
Stock No:

WPIEA2007200
ISBN:

9781451867640
ISSN:

1018-5941

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