Contents -- I. INTRODUCTION -- II. THE MODEL -- III. BUILDING THE MODEL -- IV. FORECASTING AND POLICY ANALYSIS -- V. AN EXAMPLE -- VI. CONCLUSIONS -- REFERENCES
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
Notes
Cover title
"March 2006."
Bibliography
Includes bibliographical references (pages 62-67)
Notes
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