Upgrading the Czech National Bank's Core Forecasting Model g3+

Frantisek Brazdik, Karel Musil, Tomas Pokorny, Tomáš Šestořád, Jaromir Tonner and Jan Zacek

Working Papers from Czech National Bank, Research and Statistics Department

Abstract: We present the upgraded version of g3+, the Czech National Bank's core forecasting model, which became operational in April 2024 and summarizes its additional modifications over 2024. This paper outlines the innovative features of the model and the motivations behind their adoption. The enhancements also reflect the period from 2020 to 2022, which was marked by extraordinary events such as the Covid-19 pandemic and a significant surge in energy commodity prices. The upgraded g3+ now includes, among others, the endogenous decomposition of foreign economic activity into gap and trend components, a refined structure of foreign producer prices, and adjusted links between foreign and domestic economies. In addition, several model parameters have been recalibrated to reflect current and anticipated economic conditions. The introduction of these model changes and parameter adjustments lead to improved forecasting performance relative to the previous version of the model.

Keywords: Conditional forecast; DSGE; energy; g3+ model; small open economy; two-country model (search for similar items in EconPapers)
JEL-codes: C51 C53 E27 E37 F41 (search for similar items in EconPapers)
Date: 2025-05
New Economics Papers: this item is included in nep-for and nep-mon
References: View complete reference list from CitEc
Citations:

Downloads: (external link)
https://www.cnb.cz/export/sites/cnb/en/economic-re ... wp/cnbwp_2025_07.pdf

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cnb:wpaper:2025/7

Access Statistics for this paper

More papers in Working Papers from Czech National Bank, Research and Statistics Department Contact information at EDIRC.
Bibliographic data for series maintained by Tomas Karhanek ().