Faithin Omaha eBook Collection

Download or read book Practical Model-Based Monetary Policy Analysis written by Philippe D Karam and published by International Monetary Fund. This book was released on 2006-03 with total page 74 pages. Available in PDF, EPUB and Kindle. Book excerpt: 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.