DSGE Modeling at the Fund: Applications and Further Developments

42 Pages Posted: 28 Nov 2007

See all articles by Dennis P. J. Botman

Dennis P. J. Botman

International Monetary Fund (IMF) - Fiscal Affairs Department

Philippe D. Karam

International Monetary Fund (IMF)

Douglas Laxton

International Monetary Fund (IMF) - Research Department

David Rose

QED Solutions

Date Written: August 2007

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 overlapping-generations structure, has been designed to analyze the longer-term consequences of alternative fiscal policies.

Keywords: Working Paper, Fiscal policy, Economic models, Monetary policy

Suggested Citation

Botman, Dennis P. J. and Karam, Philippe and Laxton, Douglas and Rose, David E., DSGE Modeling at the Fund: Applications and Further Developments (August 2007). IMF Working Paper No. 07/200, Available at SSRN: https://ssrn.com/abstract=1033201

Dennis P. J. Botman

International Monetary Fund (IMF) - Fiscal Affairs Department ( email )

700 19th Street, NW
Washington, DC 20431
United States

Philippe Karam (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Douglas Laxton

International Monetary Fund (IMF) - Research Department ( email )

700 19th Street NW
Washington, DC 20431
United States

David E. Rose

QED Solutions ( email )

248 Queen Elizabeth Drive
Ottawa, K1S 3M5
Canada

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