An Aggregate Model of Output, Inflation and Interest Rates for Industrialised Countries

Michael Beenstock ()

No 164, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We estimate an aggregate econometric model of the industrial economies using annual data drawn from the postwar period. The model includes equations for GDP, inflation, interest rates and non-oil commodity prices. GDP and inflation reflect the evolution of aggregate supply and demand while commodity prices vary directly with economic activity and real oil prices and inversely with real interest rates. The latter depend upon the supply and demand for loanable funds in the world capital market as well as portfolio balance effects and economic activity.

Keywords: Commodity Prices; GDP; Loanable Funds; Oil Prices; Portfolio Balance Effect; World Capital Market (search for similar items in EconPapers)
Date: 1987-03

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