Prospects for the Use of DSGE Models by Finance Ministries: The Experience of Global Regulators

Samwel Lazaryan and Evgenii V. Mayorov ()
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Evgenii V. Mayorov: Financial Research Institute, Moscow 127006, Russia

Finansovyj žhurnal — Financial Journal, 2018, issue 5, 70-82

Abstract: The article provides the analysis of specific model choices of public institutions and international organizations. The authors determine that the majority of central banks in the sample use DSGE models. On the other hand, DSGE models are far less common in ministries of finances. Currently, ministries prefer to use so-called macroeconometric models (MM). International organizations such as the IMF and the OECD have a greater variability of models in use including both DSGE and MM. Based on the academic and practical experience of DSGE modeling the authors find that this type of models is perfectly suitable for the usage in a ministry of finances. The authors also propose that current model selection criteria should be enhanced with accordance to the benefits provided by DSGE modeling.

Keywords: forecast; macroeconomic modeling; macroeconometric models; general equilibrium models; fiscal policy; model criteria (search for similar items in EconPapers)
JEL-codes: E20 E60 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:fru:finjrn:180506:p:70-82

DOI: 10.31107/2075-1990-2018-5-70-82

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