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

By Andrew Berg, Philippe D. Karam, D. Laxton. Social Science Research Network, 2006

113 citations recorded by the source corpus.

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.

Subfields: Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/bc00d09efc604834c83502541f3849e2eebb7e2b