DSGE Modeling at the Fund: Applications and Further Developments

Dennis Botman, David Rose, Douglas Laxton and Philippe Karam

No 2007/200, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; labor market; crowding out; open economy; aggregate demand; personal income; product market (search for similar items in EconPapers)
Pages: 41
Date: 2007-08-01
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Citations: View citations in EconPapers (18)

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