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Practical Model-Based Monetary Policy Analysis A How-To Guide

This paper provides a how-to guide to model-based forecasting and monetary policy analysis. It describes a simple structural model, along the lines of those in use in a number of central banks. This workhorse model consists of an aggregate demand (or IS) curve, a price-setting (or Phillips) curve, a...

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Bibliographic Details
Main Author: Laxton, Douglas
Other Authors: Berg, Andrew, Karam, Philippe
Format: eBook
Language:English
Published: Washington, D.C. International Monetary Fund 2006
Series:IMF Working Papers
Subjects:
Energy: Demand And Supply
Inflation
Oil Prices
Output Gap
Currency; Foreign Exchange
Computational Techniques
Deflation
Production
Production; Economic Theory
Model Construction And Estimation
Macroeconomics: Production
Money And Interest Rates: Forecasting And Simulation
Price Level
Foreign Exchange
Prices
Macroeconomics
Real Exchange Rates
Exchange Rates
Monetary Policy
Production And Operations Management
United States
Online Access:
Collection: International Monetary Fund - Collection details see MPG.ReNa
Description
Summary:This paper provides a how-to guide to model-based forecasting and monetary policy analysis. It describes a simple structural model, along the lines of those in use in a number of central banks. This workhorse model consists of an aggregate demand (or IS) curve, a price-setting (or Phillips) curve, a version of the uncovered interest parity condition, and a monetary policy reaction function. The paper discusses how to parameterize the model and use it for forecasting and policy analysis, illustrating with an application to Canada. It also introduces a set of useful software tools for conducting a model-consistent forecast
Physical Description:69 pages
ISBN:9781451863413

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