The Bank of Canada's new Quarterly Projection Model (QPM): An introduction

Stephen Poloz, David Rose and Robert Tetlow ()
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Stephen Poloz: Bank of Canada, http://www.bankofcanada.ca/
David Rose: Bank of Canada, http://www.bankofcanada.ca/

Bank of Canada Review, 1994, vol. 1994, issue Autumn, pages 23-38

Abstract: This article provides an overview of the Bank of Canada's new economic model, the Quarterly Projection Model (QPM), which has been under development at the Bank since 1989. The model has two roles. It is used to make economic projections, which are conducted quarterly and form an important basis for discussions of monetary policy between staff and senior management. QPM is also a research tool: it was developed to analyse important changes to the economy or macroeconomic policies which require a deeper understanding of long-term economic forces. The model pays particular attention to factors shaping long-term equilibrium, such as stocks of wealth, capital, government debt and net foreign assets. Various sources of dynamics, including the adjustment of forward-looking expectations, operate to determine the transition path to equilibrium and the consistency of expectations. The article discusses the history of QPM and earlier economic models at the Bank, and provides a simple overview of how the model works.

JEL-codes: C53 E17 (search for similar items in EconPapers)
Date: 1994
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