The Macroeconomic Forecast Model (MFM) of the Bank of Guatemala Bank of Guatemala. September Abstract

Size: px
Start display at page:

Download "The Macroeconomic Forecast Model (MFM) of the Bank of Guatemala Bank of Guatemala. September Abstract"

Transcription

1 The Macroeconomic Forecas Model (MFM) of he Bank of Guaemala Bank of Guaemala Sepember 27 Absrac This documen describes he so-called semi-srucural macroeconomic model (henceforh MMS, for Modelo Macroeconómico Semiesrucural ) ha he Bank of Guaemala has adoped o faciliae inerpreing he sae of he economy and o suppor is policymaking process in pursui of is fundamenal objecive. The model consiss of a sysem of equaions ha quanify he direcion and magniude of he correlaions among he principal macroeconomic variables, as well as foreseeable changes in he variables, aking ino accoun he reacion of economic agens o he Bank s moneary policy, which is organised around explici inflaion arges.

2 TABLE OF CONTENTS. Inroducion The Bank of Guaemala s moneary policy forecasing and analysis sysem (SPAPM) The semi-srucural macroeconomic model... 3 (a) Principal channels by which moneary policy is ransmied... 4 (b) Informaion supplemenary o he MMS... 5 (c) Risk assessmen and moneary policy recommendaions... 6 (d) Mechanism by which he Bank s moneary policy forecasing and analysis sysem (SPAPM) funcions Simulaions... 8 (a) Ineres rae shock simulaion covering a wo-year period... 8 (b) The exchange-rae channel... 9 (c) The expecaions channel... (d) Conclusions...

3 . Inroducion Moneary policy in Guaemala during he 98s and early 99s was organised around moneary arges. Objecives for moneary aggregaes were esablished, based on he judgmen ha changes in he aggregaes accouned, o a large exen, for he course of inflaion. Already in he lae 99s, however, and more markedly since hen, he demand for money has become less sable, making he money supply a less imporan shor-erm facor in inflaion. In ligh of his, and considering he experience of oher counries, he Bank of Guaemala decided o move o a scheme of explici inflaion arges, in which i publicly announces medium-erm inflaion arges and formally commis o achieving hem. According o he provisions of is new charer, daing from 22, he Bank s fundamenal objecive is o help creae and mainain he condiions mos conducive o he orderly developmen of he counry s economy by fosering moneary, exchange-rae and credi condiions ha promoe general price sabiliy. The insiuion s governing body, he Moneary Board, has ranslaed his mandae ino inflaion arges ha call for gradually reducing inflaion from 6% o 3% beween 26 and 2 (wih a +/- % margin of flucuaion). To achieve his, he Bank may change he leading moneary-policy ineres rae, namely, he ineres rae on 7-day cerificaes of deposi issued by he Bank. This rae is o be modified by he Moneary Board in he meeings i ordinarily holds according o a predeermined imeable in he hird week of each monh. The decisions i makes on hose occasions are based on a number of economic indicaors, including is semi-srucural macroeconomic model (MMS), which is a sysem of simulaneous equaions describing he macroeconomic dynamics of he principal mechanisms by which he Cenral Bank ransmis moneary policy o he real secor of he Guaemalan economy. Since he sysem of explici inflaion arges seeks o anchor he expecaions of economic agens by enunciaing inflaion arges, he Bank mus be able o forecas he behaviour of variables ha are vial o effecive moneary policy. The moneary policy rae and inflaion rae are paricularly imporan in his respec. The presen documen examines he semi-srucural macroeconomic model (MMS) ha he Bank of Guaemala has adoped o faciliae inerpreing he sae of he economy and o suppor is policymaking process in pursui of is fundamenal objecive. The model consiss of a sysem of equaions ha quanify he direcion and magniude of he relaionships among he principal macroeconomic variables, as well as foreseeable changes in he variables, aking ino accoun he reacion of economic agens o he moneary policy decisions ha he Bank makes in pursui of explici inflaion arges. The MMS is a neo-keynesian fixed-price model based on hree moneary ransmission mechanisms: (i) aggregae demand; (ii) exchange raes; and (iii) expecaions. Thus, he MMS provides an analyical framework for accurae and orderly policy o comba he various inflaionary pressures. I was consruced wih valuable cooperaion from expers specializing in he creaion of such models. The Inernaional Moneary Fund s echnical assisance missions on inflaion argeing were of paricular imporance o he Bank. The purpose here is o explain, in as much deail as possible, he model and how i funcions. 2

4 This documen describes he principal feaures of he model, which are essenially designed o creae and calibrae each of he main equaions needed o model he macroeconomic effecs of he various ypes of shocks he model is capable of simulaing. Secion 2, below, describes he moneary policy forecasing and analysis sysem (Sisema de Pronósicos y Análisis de Políica Monearia, or SPAPM) adoped by he Bank of Guaemala, which uses his model. Secion 3 analyses he medium- and long-erm economic effecs of various shocks ha could affec he long-erm equilibrium of he Guaemalan economy. Lasly, Secion 4 provides a brief conclusion o he repor. 2. The Bank of Guaemala s moneary policy forecasing and analysis sysem (SPAPM) As one elemen of a moneary regime based on explici inflaion arges, he Bank of Guaemala s moneary policy forecasing and analysis sysem consiss of a se of echnical ools (economeric models, relevan informaion from analyss, economic indicaors, daabases, ec.) ha are used o forecas he behaviour of economic variables imporan o he Cenral Bank (principally, inflaion and economic variables), plus he various aciviies involved in making moneary policy decisions once he projecions and possible macroeconomic oucomes of differen policy measures are aken ino accoun. The sysem is par of a series of operaional changes ha he Bank of Guaemala is implemening as i makes he ransiion o an inflaion argeing scheme. The sysem conains hree principal elemens: (i) a semi-srucural forecasing model for he Guaemalan economy (he MMS); (ii) informaion supplemenary o he MMS; and (iii) risk assessmen and moneary policy recommendaions. These componens of he sysem are explained in he individual secions below. 3. The semi-srucural macroeconomic model The role of macroeconomic models in an explici inflaion argeing regime are principally: (i) o describe he ineracions among key macroeconomic variables in he medium erm; (ii) o provide consisency in he opinions used as a basis for formulaing he projecions; (iii) o faciliae sysemaic analysis of he risks associaed wih prediced scenarios, including sensiiviy o hypoheical facors and shocks, as well as policy responses; (iv) o aid in coherenly and sysemaically considering and developing major moneary policy issues; and (v) o provide a useful and coheren framework for analysis, discussion and decisionmaking regarding moneary policy, in addiion o mere quaniaive precision in projecions and forecasing. The MMS is a sysem of equaions ha quanifies he magniude and direcion of he relaionships among he principal macroeconomic variables, as well as foreseeable changes in hese, facoring in economic agens reacions o moneary policy. The sysem s purpose is o assis he Bank of Guaemala in inerpreing he sae of he economy, and in making policy decisions in pursui of is fundamenal objecives. Thus, he model is designed o reflec a consensus of he Bank s governing bodies and echnical saff regarding he mechanism by which policy measures, hrough various ransmission channels, affec general 3

5 price levels. The MMS is an analyical framework ha promoes accurae and orderly deliberaion on measures o comba he various inflaionary pressures. The MMS reflecs hree channels of moneary policy ransmission: (i) aggregae demand; (ii) exchange raes; and (iii) expecaions. (a) Principal channels by which moneary policy is ransmied The aggregae demand channel consiss of he effecs of policy on he oal oupu gap and on inflaion, when he Cenral Bank s nominal moneary-policy ineres rae is changed. An increase in his rae will produce an increase in nominal and real long-erm ineres raes. An increase in he real long-erm ineres rae produces a decline in planned invesmen, durable goods consumpion and, herefore, in he oupu gap and domesic inflaion. Furhermore, an increase in he moneary-policy ineres rae produces a rise in he long-erm ineres rae spread. This encourages capial flows ino he counry from invesors seeking beer reurns on heir capial. Capial inflows increase he supply of foreign currency in he counry, raising nominal and real exchange raes, hus reducing expors, wih a negaive effec on he domesic oupu gap and on inflaion. The exchange rae channel consiss of he direc effec ha changes in he exchange rae exer on domesic prices. The effec on he consumer price index is direc, because impored producs play a very significan role in he index. Finally, he expecaions of economic agens are imporan in deermining prices. Inflaion expecaions, in paricular, are a funcion of ineria and raional expecaions. Exchange-rae expecaions shif wih changes in he spread beween foreign and domesic ineres raes, and as a resul of changes in he counry s credi risk. Figure Canal de Demanda Agregada Inflación Canal del Tipo de Cambio Inflación Canal de Expecaivas Inflación 4

6 The MMS is a mahemaical formulaion of he ransmission mechanisms illusraed in Figure. The principal equaions making up he model are described below. Domesic aggregae demand DD d = A d + (.9 A d + + A R + ε () Exernal aggregae demand x ) 2 * x =.99( x+ x ) + A3 ( A4 z + y x ) + ε (2) XD Toal demand y ) = A5 x + ( A5 d (3) Aggregae supply (Phillips curve) oil PC ( B2 + B3 ) z + B3 q + ( B2 B y ) ε π + (4) e, π =.99( π + π ) + B 3) Moneary policy rule i = D i + ( D ) i + D ( π π D y + ε (5) ( ) PM ) 3 Uncovered ineres rae pariy * e, I I = 4( s + s ) + ρ + ε MD (6) Yield curve I CR (( i + i + i + i ) / + erm ) + ε = F I + ( F ) (7) Long-erm Fisher equaion e, R = I π + (8) Inflaion expecaions π (9) e, + = Wπ + + ( W ) π Exchange-rae expecaions e, s = W2s+ + W2 ) s + ( z 2 + ( ss ) + π π () (b) Informaion supplemenary o he MMS The supplemenary informaion needed for he MMS o formulae projecions includes (i) a daa managemen sysem; (ii) shor-erm inflaion projecions; (iii) saellie models; and (iv) oher relevan informaion. We now urn o each of hese. Daa managemen sysem 5

7 The MMS daa managemen sysem consiss of a daabase wih curren values for he principal variables in he MMS, as well as repors from hose responsible for monioring he relevan informaion and managing he daabase. The repors indicae possible effecs on he MMS and on shor-erm projecions ha could resul from he recenly published informaion. The daabase provides easy access o informaion for hose working wih he MMS and for hose responsible for producing shor-erm projecions. I consiues official informaion available o all personnel in he Cenral Bank s economic division. Shor-erm inflaion projecions Shor-erm inflaion projecions are based on daa provided by he marke analysis secion, which is a uni wihin he Cenral Bank responsible for monioring inflaion. Projecions are based on exper knowledge of facors such as seasonal paerns and rends in componens of he price index, as well as on experienced judgmen. Proposed projecions are presened o he forecasing eam, which is responsible for monioring all maers relaed o he MMS. I makes he final decision on wheher o accep he shor-erm projecion and anchor i in he model as an iniial condiion. Oher relevan informaion In addiion o he above, he MMS draws on informaion from members of he forecasing eam responsible for assessing he possible effecs ha various domesic and foreign variables could have on domesic prices. Their opinions are also imporan inpu for he forecas. In addiion, he MMS incorporaes he houghs and analysis of he Implemenaion Commiee, which are based on he behaviour of he variables considered indicaive of moneary policy, as well as on oher crieria ha he commiee deems perinen. Ineracion beween he forecasing eam and he Implemenaion Commiee is essenial, since he MMS mus incorporae he opinions of he commiee; oherwise, he MMS forecass would be of lile relevance in he commiee s moneary policy decisionmaking. (c) Risk assessmen and moneary policy recommendaions The risk assessmen is based on simulaed scenarios for he endogenous variables, principally he inflaion and moneary-policy ineres rae figures ha can be expeced from developmens in he MMS s exogenous variables. On he basis of he risk assessmen, a moneary policy recommendaion is made o he Implemenaion Commiee, which considers i in he conex of he moneary, exchange-rae and credi policy se by he Moneary Board, as one elemen in deermining wheher o change he moneary-policy ineres rae. MMS endogenous variables are: inflaion, he oupu gap, he moneary-policy ineres rae, he long-erm marke ineres rae, he nominal exchange rae and he real exchange rae. Is exogenous variables are: foreign inflaion, he foreign ineres rae, he exernal oupu gap, inernaional oil prices, counry risk, and he spread beween shor-erm and long-erm ineres raes. Noe ha for he purpose of he model, he foreign variables essenially reflec condiions in he Unied Saes. 6

8 (d) Mechanism by which he Bank s moneary policy forecasing and analysis sysem (SPAPM) funcions The SPAPM is a quarerly process ha akes place in various sages, and involves he Cenral Bank s enire economic division. Table shows he chronology of aciviies involved in he SPAPM. No. Subjec Oucome of he aciviy Paricipans Siuaional analysis meeing ( Sigues meeing ) Lis of issues ha deserve special aenion for he shor-erm inflaion projecion 2 Forecasing echniques meeing Lis of changes o models for use in shor-erm projecions 3 Iniial saus meeing Economic explanaion of iniial condiions for MMS. In addiion, values will be esablished for proposal o he Implemenaion Commiee (IC) 4 Meeing on iniial saus of he Values o be used, as iniial economy condiions in he semisrucural model, o creae he forecas. These include long-erm projecions for exogenous variables obained from exernal sources. 5 Firs version of forecas Economic explanaion of he forecas, and lis of adjusmens o he forecas 6 Official announcemen of inflaion forecas 7 Implemenaion Commiee meeing The coordinaor of he FT submis repor on inflaion o IC IC mees o analyse changes in he moneary-policy ineres rae 8 Pos-morem analysis Lis of changes o SPAPM for he nex quarer Economic Head (EH) and Forecasing Team (FT) Forecasing Team (PT) FT EH and FT Implemenaion Commiee (IC) GE and FT IC IC EH and FT 7

9 4. Simulaions (a) Ineres rae shock simulaion covering a wo-year period Based on he curren calibraion of he MMS, an increase in he moneary-policy ineres rae produces increases in he nominal long-erm ineres rae, he real long-erm ineres rae, and he spread in real long-erm ineres raes. The rise in real long-erm ineres raes causes a reducion in he domesic-based oupu gap and also, herefore, in he overall oupu gap, hus ending o lower he inflaion rae. These effecs are indicaed in he following chars, which show he rigger-response funcions for a shock of basis poins in he leading ineres rae. 6.4 Policy Ineres Rae Nominal Long-erm Ineres Rae Real Long-erm Ineres Rae Long-erm Ineres Rae Gap Domesic Demand Gap Oupu Gap Inflaion

10 (b) The exchange-rae channel In he MMS, he exchange-rae channel operaes in wo ways. Firs, an increase in he monearypolicy ineres rae causes iniial real appreciaion, which in urn reduces he exernal-demand oupu gap. This narrows he oupu gap and, herefore, reduces inflaion. The chars below show he rigger-response funcions ha reflec hese effecs in he case of a shock of 25 basis poins in he leading moneary-policy ineres rae. A he same ime, he real iniial appreciaion has a direc moderaing effec on inflaion (since producion coss decline as he prices of impored inpus fall) Policy Ineres Rae Rae of Variaion in Nominal Exchange Rae.8.4 Gap in RER Exernal Demand Gap Oupu gap 3. Inflaion

11 (c) The expecaions channel An increase in he moneary-policy ineres rae firs operaes hrough he expecaions channel, causing a reducion ha anicipaes he reducion in observed inflaion.

12 (d) Conclusions The purpose of he semi-srucural macroeconomic model (Modelo Macroeconómico Semiesrucural, or MMS) is o assis he Bank of Guaemala in inerpreing he sae of he economy and making policy decisions in pursui of is fundamenal objecive. I provides an analyical framework ha faciliaes more accurae and orderly consideraion of policy measures o comba he various inflaionary pressures. The rigger-response funcions illusrae he principal channels for he ransmission of moneary policy and heir repercussions wihin he economy. Beyond being a mechanism for forecasing, he MMS is a ool ha provides a heoreical framework for moneary policy discussion and decisionmaking.

Output: The Demand for Goods and Services

Output: The Demand for Goods and Services IN CHAPTER 15 how o incorporae dynamics ino he AD-AS model we previously sudied how o use he dynamic AD-AS model o illusrae long-run economic growh how o use he dynamic AD-AS model o race ou he effecs

More information

Macroeconomics II A dynamic approach to short run economic fluctuations. The DAD/DAS model.

Macroeconomics II A dynamic approach to short run economic fluctuations. The DAD/DAS model. Macroeconomics II A dynamic approach o shor run economic flucuaions. The DAD/DAS model. Par 2. The demand side of he model he dynamic aggregae demand (DAD) Inflaion and dynamics in he shor run So far,

More information

ANSWER ALL QUESTIONS. CHAPTERS 6-9; (Blanchard)

ANSWER ALL QUESTIONS. CHAPTERS 6-9; (Blanchard) ANSWER ALL QUESTIONS CHAPTERS 6-9; 18-20 (Blanchard) Quesion 1 Discuss in deail he following: a) The sacrifice raio b) Okun s law c) The neuraliy of money d) Bargaining power e) NAIRU f) Wage indexaion

More information

BUDGET ECONOMIC AND FISCAL POSITION REPORT

BUDGET ECONOMIC AND FISCAL POSITION REPORT BUDGET ECONOMIC AND FISCAL POSITION REPORT - 2004 Issued by he Hon. Miniser of Finance in Terms of Secion 7 of he Fiscal Managemen (Responsibiliy) Ac No. 3 of 1. Inroducion Secion 7 of he Fiscal Managemen

More information

MONETARY POLICY IN MEXICO. Monetary Policy in Emerging Markets OECD and CCBS/Bank of England February 28, 2007

MONETARY POLICY IN MEXICO. Monetary Policy in Emerging Markets OECD and CCBS/Bank of England February 28, 2007 MONETARY POLICY IN MEXICO Moneary Policy in Emerging Markes OECD and CCBS/Bank of England February 8, 7 Manuel Ramos-Francia Head of Economic Research INDEX I. INTRODUCTION II. MONETARY POLICY STRATEGY

More information

The macroeconomic effects of fiscal policy in Greece

The macroeconomic effects of fiscal policy in Greece The macroeconomic effecs of fiscal policy in Greece Dimiris Papageorgiou Economic Research Deparmen, Bank of Greece Naional and Kapodisrian Universiy of Ahens May 22, 23 Email: dpapag@aueb.gr, and DPapageorgiou@bankofgreece.gr.

More information

External balance assessment:

External balance assessment: Exernal balance assessmen: Balance of paymens Macroeconomic Analysis Course Banking Training School, Sae Bank of Vienam Marin Fukac 30 Ocober 3 November 2017 Economic policies Consumer prices Economic

More information

Two ways to we learn the model

Two ways to we learn the model Two ways o we learn he model Graphical Inerface: Model Algebra: The equaion you used in your SPREADSHEET. Corresponding equaion in he MODEL. There are four core relaionships in he model: you have already

More information

CURRENCY CHOICES IN VALUATION AND THE INTEREST PARITY AND PURCHASING POWER PARITY THEORIES DR. GUILLERMO L. DUMRAUF

CURRENCY CHOICES IN VALUATION AND THE INTEREST PARITY AND PURCHASING POWER PARITY THEORIES DR. GUILLERMO L. DUMRAUF CURRENCY CHOICES IN VALUATION AN THE INTEREST PARITY AN PURCHASING POWER PARITY THEORIES R. GUILLERMO L. UMRAUF TO VALUE THE INVESTMENT IN THE OMESTIC OR FOREIGN CURRENCY? Valuing an invesmen or an acquisiion

More information

Forecasting and Monetary Policy Analysis in Emerging Economies: The case of India (preliminary)

Forecasting and Monetary Policy Analysis in Emerging Economies: The case of India (preliminary) Forecasing and Moneary Policy Analysis in Emerging Economies: The case of India (preliminary) Rudrani Bhaacharya, Pranav Gupa, Ila Panaik, Rafael Porillo New Delhi 19 h November This presenaion should

More information

Empirical analysis on China money multiplier

Empirical analysis on China money multiplier Aug. 2009, Volume 8, No.8 (Serial No.74) Chinese Business Review, ISSN 1537-1506, USA Empirical analysis on China money muliplier SHANG Hua-juan (Financial School, Shanghai Universiy of Finance and Economics,

More information

a. If Y is 1,000, M is 100, and the growth rate of nominal money is 1 percent, what must i and P be?

a. If Y is 1,000, M is 100, and the growth rate of nominal money is 1 percent, what must i and P be? Problem Se 4 ECN 101 Inermediae Macroeconomics SOLUTIONS Numerical Quesions 1. Assume ha he demand for real money balance (M/P) is M/P = 0.6-100i, where is naional income and i is he nominal ineres rae.

More information

Portfolio investments accounted for the largest outflow of SEK 77.5 billion in the financial account, which gave a net outflow of SEK billion.

Portfolio investments accounted for the largest outflow of SEK 77.5 billion in the financial account, which gave a net outflow of SEK billion. BALANCE OF PAYMENTS DATE: 27-11-27 PUBLISHER: Saisics Sweden Balance of Paymens and Financial Markes (BFM) Maria Falk +46 8 6 94 72, maria.falk@scb.se Camilla Bergeling +46 8 6 942 6, camilla.bergeling@scb.se

More information

Macroeconomics II THE AD-AS MODEL. A Road Map

Macroeconomics II THE AD-AS MODEL. A Road Map Macroeconomics II Class 4 THE AD-AS MODEL Class 8 A Road Map THE AD-AS MODEL: MICROFOUNDATIONS 1. Aggregae Supply 1.1 The Long-Run AS Curve 1.2 rice and Wage Sickiness 2.1 Aggregae Demand 2.2 Equilibrium

More information

The Relationship between Money Demand and Interest Rates: An Empirical Investigation in Sri Lanka

The Relationship between Money Demand and Interest Rates: An Empirical Investigation in Sri Lanka The Relaionship beween Money Demand and Ineres Raes: An Empirical Invesigaion in Sri Lanka R. C. P. Padmasiri 1 and O. G. Dayarana Banda 2 1 Economic Research Uni, Deparmen of Expor Agriculure 2 Deparmen

More information

Economics 301 Fall Name. Answer all questions. Each sub-question is worth 7 points (except 4d).

Economics 301 Fall Name. Answer all questions. Each sub-question is worth 7 points (except 4d). Name Answer all quesions. Each sub-quesion is worh 7 poins (excep 4d). 1. (42 ps) The informaion below describes he curren sae of a growing closed economy. Producion funcion: α 1 Y = K ( Q N ) α Producion

More information

Yield Curve Construction and Medium-Term Hedging in Countries with Underdeveloped Financial Markets

Yield Curve Construction and Medium-Term Hedging in Countries with Underdeveloped Financial Markets Local ineres rae risk approach Empirical resuls Supplemen Yield Curve Consrucion and Medium-Term Hedging in Counries wih Underdeveloped Financial Markes Model based pricing and valuaion M. Cincibuch 1

More information

MONETARY POLICY AND LONG TERM INTEREST RATES IN GERMANY *

MONETARY POLICY AND LONG TERM INTEREST RATES IN GERMANY * MONETARY POLICY AND LONG TERM INTEREST RATES IN GERMANY * Ger Peersman Bank of England Ghen Universiy Absrac In his paper, we provide new empirical evidence on he relaionship beween shor and long run ineres

More information

(1 + Nominal Yield) = (1 + Real Yield) (1 + Expected Inflation Rate) (1 + Inflation Risk Premium)

(1 + Nominal Yield) = (1 + Real Yield) (1 + Expected Inflation Rate) (1 + Inflation Risk Premium) 5. Inflaion-linked bonds Inflaion is an economic erm ha describes he general rise in prices of goods and services. As prices rise, a uni of money can buy less goods and services. Hence, inflaion is an

More information

The Global Factor in Neutral Policy Rates

The Global Factor in Neutral Policy Rates The Global acor in Neural Policy Raes Some Implicaions for Exchange Raes Moneary Policy and Policy Coordinaion Richard Clarida Lowell Harriss Professor of Economics Columbia Universiy Global Sraegic Advisor

More information

National saving and Fiscal Policy in South Africa: an Empirical Analysis. by Lumengo Bonga-Bonga University of Johannesburg

National saving and Fiscal Policy in South Africa: an Empirical Analysis. by Lumengo Bonga-Bonga University of Johannesburg Naional saving and Fiscal Policy in Souh Africa: an Empirical Analysis by Lumengo Bonga-Bonga Universiy of Johannesburg Inroducion A paricularly imporan issue in Souh Africa is he exen o which fiscal policy

More information

The event-study activity puzzle

The event-study activity puzzle 3 2017 The even-sudy aciviy puzzle Jeffrey R. Campbell, Jonas D. M. Fisher, Alejandro Jusiniano, and Leonardo Melosi Inroducion and summary 1 If news of higher fuure ineres raes reflecs a shif in he sance

More information

UCLA Department of Economics Fall PhD. Qualifying Exam in Macroeconomic Theory

UCLA Department of Economics Fall PhD. Qualifying Exam in Macroeconomic Theory UCLA Deparmen of Economics Fall 2016 PhD. Qualifying Exam in Macroeconomic Theory Insrucions: This exam consiss of hree pars, and you are o complee each par. Answer each par in a separae bluebook. All

More information

Problem Set 1 Answers. a. The computer is a final good produced and sold in Hence, 2006 GDP increases by $2,000.

Problem Set 1 Answers. a. The computer is a final good produced and sold in Hence, 2006 GDP increases by $2,000. Social Analysis 10 Spring 2006 Problem Se 1 Answers Quesion 1 a. The compuer is a final good produced and sold in 2006. Hence, 2006 GDP increases by $2,000. b. The bread is a final good sold in 2006. 2006

More information

OPTIMUM FISCAL AND MONETARY POLICY USING THE MONETARY OVERLAPPING GENERATION MODELS

OPTIMUM FISCAL AND MONETARY POLICY USING THE MONETARY OVERLAPPING GENERATION MODELS Kuwai Chaper of Arabian Journal of Business and Managemen Review Vol. 3, No.6; Feb. 2014 OPTIMUM FISCAL AND MONETARY POLICY USING THE MONETARY OVERLAPPING GENERATION MODELS Ayoub Faramarzi 1, Dr.Rahim

More information

Balance of Payments. Second quarter 2012

Balance of Payments. Second quarter 2012 Balance of Paymens Second quarer 2012 Balance of Paymens Second quarer 2012 Saisics Sweden 2012 Balance of Paymens. Second quarer 2012 Saisics Sweden 2012 Producer Saisics Sweden, Balance of Paymens and

More information

Section 4 The Exchange Rate in the Long Run

Section 4 The Exchange Rate in the Long Run Secion 4 he Exchange Rae in he Long Run 1 Conen Objecives Purchasing Power Pariy A Long-Run PPP Model he Real Exchange Rae Summary 2 Objecives o undersand he law of one price and purchasing power pariy

More information

CHAPTER CHAPTER18. Openness in Goods. and Financial Markets. Openness in Goods, and Financial Markets. Openness in Goods,

CHAPTER CHAPTER18. Openness in Goods. and Financial Markets. Openness in Goods, and Financial Markets. Openness in Goods, Openness in Goods and Financial Markes CHAPTER CHAPTER18 Openness in Goods, and Openness has hree disinc dimensions: 1. Openness in goods markes. Free rade resricions include ariffs and quoas. 2. Openness

More information

Session IX: Special topics

Session IX: Special topics Session IX: Special opics 2. Subnaional populaion projecions 10 March 2016 Cheryl Sawyer, Lina Bassarsky Populaion Esimaes and Projecions Secion www.unpopulaion.org Maerials adaped from Unied Naions Naional

More information

On the Impact of Inflation and Exchange Rate on Conditional Stock Market Volatility: A Re-Assessment

On the Impact of Inflation and Exchange Rate on Conditional Stock Market Volatility: A Re-Assessment MPRA Munich Personal RePEc Archive On he Impac of Inflaion and Exchange Rae on Condiional Sock Marke Volailiy: A Re-Assessmen OlaOluwa S Yaya and Olanrewaju I Shiu Deparmen of Saisics, Universiy of Ibadan,

More information

Online Appendix to: Implementing Supply Routing Optimization in a Make-To-Order Manufacturing Network

Online Appendix to: Implementing Supply Routing Optimization in a Make-To-Order Manufacturing Network Online Appendix o: Implemening Supply Rouing Opimizaion in a Make-To-Order Manufacuring Nework A.1. Forecas Accuracy Sudy. July 29, 2008 Assuming a single locaion and par for now, his sudy can be described

More information

GUIDELINE Solactive Bitcoin Front Month Rolling Futures 5D Index ER. Version 1.0 dated December 8 th, 2017

GUIDELINE Solactive Bitcoin Front Month Rolling Futures 5D Index ER. Version 1.0 dated December 8 th, 2017 GUIDELINE Solacive Bicoin Fron Monh Rolling Fuures 5D Index ER Version 1.0 daed December 8 h, 2017 Conens Inroducion 1 Index specificaions 1.1 Shor name and ISIN 1.2 Iniial value 1.3 Disribuion 1.4 Prices

More information

PRESS RELEASE EURO AREA ECONOMIC AND FINANCIAL DEVELOPMENTS BY INSTITUTIONAL SECTOR - FIRST QUARTER August 2012

PRESS RELEASE EURO AREA ECONOMIC AND FINANCIAL DEVELOPMENTS BY INSTITUTIONAL SECTOR - FIRST QUARTER August 2012 1 Augus 212 PRESS RELEASE EURO AREA ECONOMIC AND FINANCIAL DEVELOPMENTS BY INSTITUTIONAL SECTOR - FIRST QUARTER 212 In he firs quarer of 212, he annual growh rae 1 of households gross disposable income

More information

Inventory Investment. Investment Decision and Expected Profit. Lecture 5

Inventory Investment. Investment Decision and Expected Profit. Lecture 5 Invenory Invesmen. Invesmen Decision and Expeced Profi Lecure 5 Invenory Accumulaion 1. Invenory socks 1) Changes in invenory holdings represen an imporan and highly volaile ype of invesmen spending. 2)

More information

You should turn in (at least) FOUR bluebooks, one (or more, if needed) bluebook(s) for each question.

You should turn in (at least) FOUR bluebooks, one (or more, if needed) bluebook(s) for each question. UCLA Deparmen of Economics Spring 05 PhD. Qualifying Exam in Macroeconomic Theory Insrucions: This exam consiss of hree pars, and each par is worh 0 poins. Pars and have one quesion each, and Par 3 has

More information

Final Exam Answers Exchange Rate Economics

Final Exam Answers Exchange Rate Economics Kiel Insiu für Welwirhschaf Advanced Sudies in Inernaional Economic Policy Research Spring 2005 Menzie D. Chinn Final Exam Answers Exchange Rae Economics This exam is 1 ½ hours long. Answer all quesions.

More information

Spring 2011 Social Sciences 7418 University of Wisconsin-Madison

Spring 2011 Social Sciences 7418 University of Wisconsin-Madison Economics 32, Sec. 1 Menzie D. Chinn Spring 211 Social Sciences 7418 Universiy of Wisconsin-Madison Noes for Econ 32-1 FALL 21 Miderm 1 Exam The Fall 21 Econ 32-1 course used Hall and Papell, Macroeconomics

More information

The Death of the Phillips Curve?

The Death of the Phillips Curve? The Deah of he Phillips Curve? Anhony Murphy Federal Reserve Bank of Dallas Research Deparmen Working Paper 1801 hps://doi.org/10.19/wp1801 The Deah of he Phillips Curve? 1 Anhony Murphy, Federal Reserve

More information

MA Advanced Macro, 2016 (Karl Whelan) 1

MA Advanced Macro, 2016 (Karl Whelan) 1 MA Advanced Macro, 2016 (Karl Whelan) 1 The Calvo Model of Price Rigidiy The form of price rigidiy faced by he Calvo firm is as follows. Each period, only a random fracion (1 ) of firms are able o rese

More information

GUIDELINE Solactive Gold Front Month MD Rolling Futures Index ER. Version 1.1 dated April 13 th, 2017

GUIDELINE Solactive Gold Front Month MD Rolling Futures Index ER. Version 1.1 dated April 13 th, 2017 GUIDELINE Solacive Gold Fron Monh MD Rolling Fuures Index ER Version 1.1 daed April 13 h, 2017 Conens Inroducion 1 Index specificaions 1.1 Shor name and ISIN 1.2 Iniial value 1.3 Disribuion 1.4 Prices

More information

A Note on Missing Data Effects on the Hausman (1978) Simultaneity Test:

A Note on Missing Data Effects on the Hausman (1978) Simultaneity Test: A Noe on Missing Daa Effecs on he Hausman (978) Simulaneiy Tes: Some Mone Carlo Resuls. Dikaios Tserkezos and Konsaninos P. Tsagarakis Deparmen of Economics, Universiy of Cree, Universiy Campus, 7400,

More information

Government Expenditure Composition and Growth in Chile

Government Expenditure Composition and Growth in Chile Governmen Expendiure Composiion and Growh in Chile January 2007 Carlos J. García Cenral Bank of Chile Saniago Herrera World Bank Jorge E. Resrepo Cenral Bank of Chile Organizaion of he presenaion:. Inroducion

More information

Macroeconomics. Part 3 Macroeconomics of Financial Markets. Lecture 8 Investment: basic concepts

Macroeconomics. Part 3 Macroeconomics of Financial Markets. Lecture 8 Investment: basic concepts Macroeconomics Par 3 Macroeconomics of Financial Markes Lecure 8 Invesmen: basic conceps Moivaion General equilibrium Ramsey and OLG models have very simple assumpions ha invesmen ino producion capial

More information

Suggested Template for Rolling Schemes for inclusion in the future price regulation of Dublin Airport

Suggested Template for Rolling Schemes for inclusion in the future price regulation of Dublin Airport Suggesed Templae for Rolling Schemes for inclusion in he fuure price regulaion of Dublin Airpor. In line wih sandard inernaional regulaory pracice, he regime operaed since 00 by he Commission fixes in

More information

Stylized fact: high cyclical correlation of monetary aggregates and output

Stylized fact: high cyclical correlation of monetary aggregates and output SIMPLE DSGE MODELS OF MONEY PART II SEPTEMBER 27, 2011 Inroducion BUSINESS CYCLE IMPLICATIONS OF MONEY Sylized fac: high cyclical correlaion of moneary aggregaes and oupu Convenional Keynesian view: nominal

More information

Documentation: Philadelphia Fed's Real-Time Data Set for Macroeconomists First-, Second-, and Third-Release Values

Documentation: Philadelphia Fed's Real-Time Data Set for Macroeconomists First-, Second-, and Third-Release Values Documenaion: Philadelphia Fed's Real-Time Daa Se for Macroeconomiss Firs-, Second-, and Third-Release Values Las Updaed: December 16, 2013 1. Inroducion We documen our compuaional mehods for consrucing

More information

ECONOMIC GROWTH. Student Assessment. Macroeconomics II. Class 1

ECONOMIC GROWTH. Student Assessment. Macroeconomics II. Class 1 Suden Assessmen You will be graded on he basis of In-class aciviies (quizzes worh 30 poins) which can be replaced wih he number of marks from he regular uorial IF i is >=30 (capped a 30, i.e. marks from

More information

CENTRO DE ESTUDIOS MONETARIOS Y FINANCIEROS T. J. KEHOE MACROECONOMICS I WINTER 2011 PROBLEM SET #6

CENTRO DE ESTUDIOS MONETARIOS Y FINANCIEROS T. J. KEHOE MACROECONOMICS I WINTER 2011 PROBLEM SET #6 CENTRO DE ESTUDIOS MONETARIOS Y FINANCIEROS T J KEHOE MACROECONOMICS I WINTER PROBLEM SET #6 This quesion requires you o apply he Hodrick-Presco filer o he ime series for macroeconomic variables for he

More information

Public Spending and the Macroeconomy: Evidence from Developing and Developed Countries

Public Spending and the Macroeconomy: Evidence from Developing and Developed Countries Inernaional Journal of Business and Economics, 2009, Vol. 8, No. 2, 133-158 Public Spending and he Macroeconomy: Evidence from Developing and Developed Counries Magda Kandil * Inernaional Moneary Fund,

More information

Discussion of Reserve Requirements for Price and Financial Stability: When Are They Effective?

Discussion of Reserve Requirements for Price and Financial Stability: When Are They Effective? Discussion of Reserve Requiremens for Price and Financial Sabiliy: When Are They Effecive? Carl E. Walsh Deparmen of Economics, Universiy of California, Sana Cruz Since he onse of he 2008 financial crisis,

More information

1. To express the production function in terms of output per worker and capital per worker, divide by N: K f N

1. To express the production function in terms of output per worker and capital per worker, divide by N: K f N THE LOG RU Exercise 8 The Solow Model Suppose an economy is characerized by he aggregae producion funcion / /, where is aggregae oupu, is capial and is employmen. Suppose furher ha aggregae saving is proporional

More information

Exam 1. Econ520. Spring 2017

Exam 1. Econ520. Spring 2017 Exam 1. Econ520. Spring 2017 Professor Luz Hendricks UNC Insrucions: Answer all quesions. Clearly number your answers. Wrie legibly. Do no wrie your answers on he quesion shees. Explain your answers do

More information

A dynamic model of financial balances for the United Kingdom

A dynamic model of financial balances for the United Kingdom A dynamic model of financial balances for he Unied Kingdom Sephen urgess Oliver urrows and Sephen Millard (ank of England) Anoine Godin (Kingson Universiy) and Sephen Kinsella (Universiy of Limerick) 24

More information

Price and Volume Measures

Price and Volume Measures 8 Price and Volume Measures Price and volume measures in he QNA should be derived from observed price and volume daa and be consisen wih corresponding annual measures. This chaper examines specific aspecs

More information

San Francisco State University ECON 560 Summer 2018 Problem set 3 Due Monday, July 23

San Francisco State University ECON 560 Summer 2018 Problem set 3 Due Monday, July 23 San Francisco Sae Universiy Michael Bar ECON 56 Summer 28 Problem se 3 Due Monday, July 23 Name Assignmen Rules. Homework assignmens mus be yped. For insrucions on how o ype equaions and mah objecs please

More information

The Empirical Study about Introduction of Stock Index Futures on the Volatility of Spot Market

The Empirical Study about Introduction of Stock Index Futures on the Volatility of Spot Market ibusiness, 013, 5, 113-117 hp://dx.doi.org/10.436/ib.013.53b04 Published Online Sepember 013 (hp://www.scirp.org/journal/ib) 113 The Empirical Sudy abou Inroducion of Sock Index Fuures on he Volailiy of

More information

VERIFICATION OF ECONOMIC EFFICIENCY OF LIGNITE DEPOSIT DEVELOPMENT USING THE SENSITIVITY ANALYSIS

VERIFICATION OF ECONOMIC EFFICIENCY OF LIGNITE DEPOSIT DEVELOPMENT USING THE SENSITIVITY ANALYSIS 1 Beaa TRZASKUŚ-ŻAK 1, Kazimierz CZOPEK 2 MG 3 1 Trzaskuś-Żak Beaa PhD. (corresponding auhor) AGH Universiy of Science and Technology Faculy of Mining and Geoengineering Al. Mickiewicza 30, 30-59 Krakow,

More information

International transmission of shocks:

International transmission of shocks: Inernaional ransmission of shocks: A ime-varying FAVAR approach o he Open Economy Philip Liu Haroon Mumaz Moneary Analysis Cener for Cenral Banking Sudies Bank of England Bank of England CEF 9 (Sydney)

More information

Measuring the Effects of Exchange Rate Changes on Investment in Australian Manufacturing Industry

Measuring the Effects of Exchange Rate Changes on Investment in Australian Manufacturing Industry Measuring he Effecs of Exchange Rae Changes on Invesmen in Ausralian Manufacuring Indusry Auhor Swif, Robyn Published 2006 Journal Tile The Economic Record DOI hps://doi.org/10.1111/j.1475-4932.2006.00329.x

More information

2. Remittances, other than dividends, by business entities to be made against invoices consistent with bills of entry collected by ZRA.

2. Remittances, other than dividends, by business entities to be made against invoices consistent with bills of entry collected by ZRA. ,, ;., Tel. (260 1) 228888 /228903-20 BANK OF ZAMBIA P.O. Box 30080, f~: Fax: (260 1) 237070 LUSAKA 10101 ' r f~. January 23,2001 CB Circular No. 08/2001. L;' f. i..new To: All Commercial Banks and Financial

More information

VOL. 4, NO. 5, December 2015 ISSN International Journal of Economics, Finance and Management All rights reserved.

VOL. 4, NO. 5, December 2015 ISSN International Journal of Economics, Finance and Management All rights reserved. Inernaional Journal of Economics, Finance and Managemen 2011-2015. All righs reserved. hp://www.ejournalofscience.org Exernal Cyclicaliy in he Face of Aggregae Demand Shocks: Pros and Cons across Developed

More information

A Study on the Relationship between Exchange Rate and Consumer Prices Based on ECM

A Study on the Relationship between Exchange Rate and Consumer Prices Based on ECM Send Orders for Reprins o reprins@benhamscience.ae 3 The Open Cyberneics & Sysemics Journal, 25, 9, 3-36 Open Access A Sudy on he Relaionship beween Exchange Rae and Consumer Prices Based on ECM Jun Liu

More information

STATIONERY REQUIREMENTS SPECIAL REQUIREMENTS 20 Page booklet List of statistical formulae New Cambridge Elementary Statistical Tables

STATIONERY REQUIREMENTS SPECIAL REQUIREMENTS 20 Page booklet List of statistical formulae New Cambridge Elementary Statistical Tables ECONOMICS RIPOS Par I Friday 7 June 005 9 Paper Quaniaive Mehods in Economics his exam comprises four secions. Secions A and B are on Mahemaics; Secions C and D are on Saisics. You should do he appropriae

More information

Description of the CBOE Russell 2000 BuyWrite Index (BXR SM )

Description of the CBOE Russell 2000 BuyWrite Index (BXR SM ) Descripion of he CBOE Russell 2000 BuyWrie Index (BXR SM ) Inroducion. The CBOE Russell 2000 BuyWrie Index (BXR SM ) is a benchmark index designed o rack he performance of a hypoheical a-he-money buy-wrie

More information

Stock Market Behaviour Around Profit Warning Announcements

Stock Market Behaviour Around Profit Warning Announcements Sock Marke Behaviour Around Profi Warning Announcemens Henryk Gurgul Conen 1. Moivaion 2. Review of exising evidence 3. Main conjecures 4. Daa and preliminary resuls 5. GARCH relaed mehodology 6. Empirical

More information

MODELLING THE US SWAP SPREAD

MODELLING THE US SWAP SPREAD MODEING THE US SWAP SPREAD Hon-un Chung, School of Accouning and Finance, The Hong Kong Polyechnic Universiy, Email: afalan@ine.polyu.edu.hk Wai-Sum Chan, Deparmen of Finance, The Chinese Universiy of

More information

P-Star Approach to Modelling and Forecasting Inflation: Some Empirical Evidence from Turkey

P-Star Approach to Modelling and Forecasting Inflation: Some Empirical Evidence from Turkey Journal of Business & Economic Policy Vol. 2, No. 3; Sepember 205 P-Sar Approach o Modelling and Forecasing Inflaion: Some Empirical Evidence from Turkey Assis. Prof. Dr. Hasan İslaince Anadolu Universiy,

More information

SMALL MENU COSTS AND LARGE BUSINESS CYCLES: AN EXTENSION OF THE MANKIW MODEL

SMALL MENU COSTS AND LARGE BUSINESS CYCLES: AN EXTENSION OF THE MANKIW MODEL SMALL MENU COSTS AND LARGE BUSINESS CYCLES: AN EXTENSION OF THE MANKIW MODEL 2 Hiranya K. Nah, Sam Houson Sae Universiy Rober Srecher, Sam Houson Sae Universiy ABSTRACT Using a muli-period general equilibrium

More information

Introduction. Enterprises and background. chapter

Introduction. Enterprises and background. chapter NACE: High-Growh Inroducion Enerprises and background 18 chaper High-Growh Enerprises 8 8.1 Definiion A variey of approaches can be considered as providing he basis for defining high-growh enerprises.

More information

2. Quantity and price measures in macroeconomic statistics 2.1. Long-run deflation? As typical price indexes, Figure 2-1 depicts the GDP deflator,

2. Quantity and price measures in macroeconomic statistics 2.1. Long-run deflation? As typical price indexes, Figure 2-1 depicts the GDP deflator, 1 2. Quaniy and price measures in macroeconomic saisics 2.1. Long-run deflaion? As ypical price indexes, Figure 2-1 depics he GD deflaor, he Consumer rice ndex (C), and he Corporae Goods rice ndex (CG)

More information

Description of the CBOE S&P 500 2% OTM BuyWrite Index (BXY SM )

Description of the CBOE S&P 500 2% OTM BuyWrite Index (BXY SM ) Descripion of he CBOE S&P 500 2% OTM BuyWrie Index (BXY SM ) Inroducion. The CBOE S&P 500 2% OTM BuyWrie Index (BXY SM ) is a benchmark index designed o rack he performance of a hypoheical 2% ou-of-he-money

More information

Supplement to Chapter 3

Supplement to Chapter 3 Supplemen o Chaper 3 I. Measuring Real GD and Inflaion If here were only one good in he world, anchovies, hen daa and prices would deermine real oupu and inflaion perfecly: GD Q ; GD Q. + + + Then, he

More information

Banks, Credit Market Frictions, and Business Cycles

Banks, Credit Market Frictions, and Business Cycles Banks, Credi Marke Fricions, and Business Cycles Ali Dib Bank of Canada Join BIS/ECB Workshop on Moneary policy and financial sabiliy Sepember 10-11, 2009 Views expressed in his presenaion are hose of

More information

Subdivided Research on the Inflation-hedging Ability of Residential Property: A Case of Hong Kong

Subdivided Research on the Inflation-hedging Ability of Residential Property: A Case of Hong Kong Subdivided Research on he -hedging Abiliy of Residenial Propery: A Case of Hong Kong Guohua Huang 1, Haili Tu 2, Boyu Liu 3,* 1 Economics and Managemen School of Wuhan Universiy,Economics and Managemen

More information

An Introduction to PAM Based Project Appraisal

An Introduction to PAM Based Project Appraisal Slide 1 An Inroducion o PAM Based Projec Appraisal Sco Pearson Sanford Universiy Sco Pearson is Professor of Agriculural Economics a he Food Research Insiue, Sanford Universiy. He has paricipaed in projecs

More information

As our brand migration will be gradual, you will see traces of our past through documentation, videos, and digital platforms.

As our brand migration will be gradual, you will see traces of our past through documentation, videos, and digital platforms. We are now Refiniiv, formerly he Financial and Risk business of Thomson Reuers. We ve se a bold course for he fuure boh ours and yours and are inroducing our new brand o he world. As our brand migraion

More information

*Corresponding author Keywords: CNH, Currency Intervention Index, Central Bank Reaction Function, Exchange Rate Intervention.

*Corresponding author Keywords: CNH, Currency Intervention Index, Central Bank Reaction Function, Exchange Rate Intervention. 016 3rd Inernaional Conference on Advanced Educaion and Managemen (ICAEM 016) ISBN: 978-1-60595-380-9 Exchange Rae Inervenion by Cenral Bank: Based on he Influence of he Hong Kong Offshore RMB Exchange

More information

An Econometric Model of a Firm s Financial Statements. Otávio Ribeiro de Medeiros ABSTRACT

An Econometric Model of a Firm s Financial Statements. Otávio Ribeiro de Medeiros ABSTRACT An Economeric Model of a Firm s Financial Saemens Oávio Ribeiro de Medeiros ABSTRACT This paper repors he consrucion and esing of an economeric model designed o represen a firm s financial saemens. More

More information

OIL-DEPENDENT REVENUES AND MACROECONOMIC STABILITY UNDER FISCAL AND MONETARY RULES: AN ANALYSIS FOR MEXICO

OIL-DEPENDENT REVENUES AND MACROECONOMIC STABILITY UNDER FISCAL AND MONETARY RULES: AN ANALYSIS FOR MEXICO OIL-DEPENDENT REVENUES AND MACROECONOMIC STABILITY UNDER FISCAL AND MONETARY RULES: AN ANALYSIS FOR MEXICO Ana María Aguilar * and Claudia Ramírez Bulos * In his paper we develop a small open economy macroeconomic

More information

Balance of Payments. Third quarter 2009

Balance of Payments. Third quarter 2009 Balance of Paymens Third quarer 2009 Balance of Paymens Third quarer 2009 Saisics Sweden 2009 Balance of Paymens. Third quarer 2009 Saisics Sweden 2009 Producer Saisics Sweden, Balance of Paymens and

More information

Introduction. Descriptive evidence of the relationship between inflation and the cycle

Introduction. Descriptive evidence of the relationship between inflation and the cycle VARIATION IN THE CYCLICAL SENSITIVITY OF SPANISH INFLATION: AN INITIAL APPROXIMATION The auhors of his aricle are Luis Julián Álvarez and Albero Urasun, of he Direcorae-General Economics, Saisics and Research.

More information

Chapter 7 Monetary and Exchange Rate Policy in a Small Open Economy

Chapter 7 Monetary and Exchange Rate Policy in a Small Open Economy George Alogoskoufis, Inernaional Macroeconomics, 2016 Chaper 7 Moneary and Exchange Rae Policy in a Small Open Economy In his chaper we analyze he effecs of moneary and exchange rae policy in a shor run

More information

Development of MEGA-D: A DSGE Model for Policy Analysis

Development of MEGA-D: A DSGE Model for Policy Analysis Developmen of EGA-D: A DGE odel for Policy Analysis David Florian and Carlos onoro Banco Cenral de Reserva del Peru (BCRP) ay 2009 (preliminary) Absrac This paper summarizes he developmen of a DGE model

More information

1 Purpose of the paper

1 Purpose of the paper Moneary Economics 2 F.C. Bagliano - Sepember 2017 Noes on: F.X. Diebold and C. Li, Forecasing he erm srucure of governmen bond yields, Journal of Economerics, 2006 1 Purpose of he paper The paper presens

More information

EVA NOPAT Capital charges ( = WACC * Invested Capital) = EVA [1 P] each

EVA NOPAT Capital charges ( = WACC * Invested Capital) = EVA [1 P] each VBM Soluion skech SS 2012: Noe: This is a soluion skech, no a complee soluion. Disribuion of poins is no binding for he correcor. 1 EVA, free cash flow, and financial raios (45) 1.1 EVA wihou adjusmens

More information

Three Essays on Unconventional Monetary Policy at the Zero Lower Bound

Three Essays on Unconventional Monetary Policy at the Zero Lower Bound Three Essays on Unconvenional Moneary Policy a he Zero Lower Bound A hesis submied by Yang Zhang o The Faculy of Graduae and Posdocoral Sudies In parial fulfillmen of he requiremens for he degree of Docor

More information

The forecasts-based instrument rule and decision making. How closely interlinked? The case of Sweden

The forecasts-based instrument rule and decision making. How closely interlinked? The case of Sweden EQUILIBRIUM Quarerly Journal of Economics and Economic Policy 2017 VOLUME 12 ISSUE 2, June p-issn 1689-765X, e-issn 2353-3293 www.economic-policy.pl ORIGINAL PAPER Ciaion: Tura-Gawron, K. (2017). The forecass-based

More information

Capital Flows, Institutions, and Financial Fragility

Capital Flows, Institutions, and Financial Fragility Capial Flows, Insiuions, and Financial Fragiliy By Wipawin Promboon Kenan-Flagler Business School UNC-Chapel Hill February 11, 2009 Model Esimaion Globalizaion Liberalizaion Greaer volume of capial flows:

More information

Ch. 1 Multinational Financial Mgmt: Overview. International Financial Environment. How Business Disciplines Are Used to Manage the MNC

Ch. 1 Multinational Financial Mgmt: Overview. International Financial Environment. How Business Disciplines Are Used to Manage the MNC Ch. Mulinaional Financial Mgm: Overview Topics Goal of he MNC Theories of Inernaional Business Inernaional Business Mehods Inernaional Opporuniies Exposure o Inernaional Risk MNC's Cash Flows & Valuaion

More information

Does Inflation Targeting Anchor Long-Run Inflation Expectations?

Does Inflation Targeting Anchor Long-Run Inflation Expectations? Does Inflaion Targeing Anchor Long-Run Inflaion Expecaions? Evidence from Long-Term Bond Yields in he Unied Saes, Unied Kingdom, and Sweden Refe S. Gürkaynak, Andrew T. Levin, and Eric T. Swanson Bilken

More information

THE INFLUENCE OF MONETARY POLICY ON INVESTMENT DECISION IN THE EURO ZONE

THE INFLUENCE OF MONETARY POLICY ON INVESTMENT DECISION IN THE EURO ZONE THE INFLUENCE OF MONETARY POLICY ON INVESTMENT DECISION IN THE EURO ZONE Valenin Mihai LEOVEANU Anca BRATU Absrac The paper aims o highligh and analyze he main heoreical and pracical aspecs regarding he

More information

An Analysis of Trend and Sources of Deficit Financing in Nepal

An Analysis of Trend and Sources of Deficit Financing in Nepal Economic Lieraure, Vol. XII (8-16), December 014 An Analysis of Trend and Sources of Defici Financing in Nepal Deo Narayan Suihar ABSTRACT Defici financing has emerged as an imporan ool of financing governmen

More information

Labour market participation rate in the euro area: performance and outlook, a long-term view

Labour market participation rate in the euro area: performance and outlook, a long-term view ECONOMIC BULLETIN 1/218 ANALYTICAL ARTICLES Labour marke paricipaion rae in he euro area: performance and oulook, a long-erm view Crisina Fernández and David Marínez Turégano 11 January 218 This aricle

More information

Lecture 23: Forward Market Bias & the Carry Trade

Lecture 23: Forward Market Bias & the Carry Trade Lecure 23: Forward Marke Bias & he Carry Trade Moivaions: Efficien markes hypohesis Does raional expecaions hold? Does he forward rae reveal all public informaion? Does Uncovered Ineres Pariy hold? Or

More information

An Incentive-Based, Multi-Period Decision Model for Hierarchical Systems

An Incentive-Based, Multi-Period Decision Model for Hierarchical Systems Wernz C. and Deshmukh A. An Incenive-Based Muli-Period Decision Model for Hierarchical Sysems Proceedings of he 3 rd Inernaional Conference on Global Inerdependence and Decision Sciences (ICGIDS) pp. 84-88

More information

Wage-Price Dynamics and Deflation in Hong Kong

Wage-Price Dynamics and Deflation in Hong Kong HEI Working Paper No: 06/2004 Wage-Price Dynamics and Deflaion in Hong Kong Hans Genberg Graduae Insiue of Inernaional Sudies Lauren L. Pauwels Graduae Insiue of Inernaional Sudies Absrac This paper provides

More information

MONETARY POLICY: THEORETICAL FRAME AND EMPIRIC EVIDENCE IN A SCHEME OF EXPLICIT INFLATION GOALS

MONETARY POLICY: THEORETICAL FRAME AND EMPIRIC EVIDENCE IN A SCHEME OF EXPLICIT INFLATION GOALS MONETARY POLICY: THEORETICAL FRAME AND EMPIRIC EVIDENCE IN A SCHEME OF EXPLICIT INFLATION GOALS I. THE PRESENTATION OF THE IMPOSSIBLE TRINITY OF THE OPEN MACROECONOMY The process of globalizaion ha has

More information

Problem 1 / 25 Problem 2 / 25 Problem 3 / 30 Problem 4 / 20 TOTAL / 100

Problem 1 / 25 Problem 2 / 25 Problem 3 / 30 Problem 4 / 20 TOTAL / 100 Deparmen of Economics Universiy of Maryland Economics 325 Inermediae Macroeconomic Analysis Final Exam Professor Sanjay Chugh Spring 2009 May 16, 2009 NAME: TA S NAME: The Exam has a oal of four (4) problems

More information

Implementing Inflation Targeting in Brazil

Implementing Inflation Targeting in Brazil Implemening Inflaion Targeing in Brazil Joel Bogdanski Alexandre Anonio Tombini Sérgio Ribeiro da Cosa Werlang Absrac Brazil has pu in place an inflaion-argeing framework for moneary policy in mid-1999,

More information

Session 4.2: Price and Volume Measures

Session 4.2: Price and Volume Measures Session 4.2: Price and Volume Measures Regional Course on Inegraed Economic Saisics o Suppor 28 SNA Implemenaion Leonidas Akriidis Office for Naional Saisics Unied Kingdom Conen 1. Inroducion 2. Price

More information