A Practical Model-Based Approach to Monetary Policy Analysis - Overview

45 Pages Posted: 17 May 2006

See all articles by Andrew Berg

Andrew Berg

International Monetary Fund (IMF) - Developing Country Studies Division

Philippe D. Karam

International Monetary Fund (IMF)

Douglas Laxton

International Monetary Fund (IMF) - Research Department

Date Written: March 2006

Abstract

This paper motivates and describes an approach to forecasting and monetary policy analysis based on the use of a simple structural macroeconomic model, along the lines of those in use in a number of central banks. It contrasts this approach with financial programming and its emphasis on monetary aggregates, as well as with more econometrically driven analyses. It presents illustrative results from an application to Canada. A companion paper provides a more detailed how-to guide and introduces a set of tools designed to facilitate this approach.

Keywords: Monetary policy, forecasting and simulation, model construction, estimation

JEL Classification: E52, E47, C51

Suggested Citation

Berg, Andrew and Karam, Philippe and Laxton, Douglas, A Practical Model-Based Approach to Monetary Policy Analysis - Overview (March 2006). IMF Working Paper, Vol. , pp. 1-45, 2006. Available at SSRN: https://ssrn.com/abstract=901871

Andrew Berg (Contact Author)

International Monetary Fund (IMF) - Developing Country Studies Division ( email )

700 19th Street NW
Washington, DC 20431
United States
202-623-8843 (Phone)
202-589-8843 (Fax)

Philippe Karam

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

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