The BCRA’s Small Economic Model
Pedro Elosegui (),
Guillermo Escudé (),
Maria Garegnani () and
No 200718, BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department
The use of macroeconomic forecasting models is a common practice in central banks for monetary policy design, for the analysis of the current economic developments and for medium and long term forecasts. Among those models, the small-scale macroeconomic models stand out. Though relatively simple, they are structured and take into account the transmission mechanisms that relate the main variables of interest: the interest rate, the exchange rate, GDP and inflation. The Small Economic Model (MEP) developed by the Central Bank of Argentina describes in a stylized and structured way the macroeconomic dynamics of a small and open country such as Argentina. This paper describes the structure of the MEP model in its two versions: an original version that is the core of the model and a second one that introduces the intervention of the monetary authority in the money and exchange rate markets. The main characteristics and limitations of the model and the estimation of parameters are depicted, and examples of the impulse-response functions resulting from both specifications are provided. Finally, the future research lines tending to strengthen the tools used by the BCRA for analysis, simulation and forecast are also mentioned.
Keywords: forecasting; general equilibrium; monetary policy; New Keynesian models (search for similar items in EconPapers)
JEL-codes: C32 C61 E32 E37 E52 E58 (search for similar items in EconPapers)
Pages: 47 pages
References: Add references at CitEc
Citations: Track citations by RSS feed
Downloads: (external link)
http://www.bcra.gov.ar/pdfs/investigaciones/WP%202007%2018.pdf Spanish version (versión en Español) (application/pdf)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bcr:wpaper:200718
Access Statistics for this paper
More papers in BCRA Working Paper Series from Central Bank of Argentina, Economic Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Federico Grillo ().