A global multi-sectoral model in local currencies

Yano Takashi

No 703, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: Economic agents make their decisions by focusing on the economic performance of their economies in their currencies rather than in a foreign currency. This shows that a multi-country economic model in local currencies is suitable to analyze global economic issues. However, international input-output tables are denominated in a specific currency such as the US dollar. Employing the OECD Intercountry Input-Output Tables, this paper presents a method to convert the international input-output tables in U.S. dollars and current prices to those in local currencies and constant prices. In addition, the structure of a global model with economies of scale and imperfect competition is illustrated. A numerical example is also demonstrated in order to show the applicability of the model.

Keywords: Global multi-country model; Exchange rate; Local currency; Money; Foreign exchange (search for similar items in EconPapers)
JEL-codes: C54 D57 D58 F47 (search for similar items in EconPapers)
Date: 2018-03
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 703. 2018-03

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