Multimod Mark III: The Core Dynamic and Steady State Model

Faruqee, Hamid; Laxton, Douglas; Turtelboom, Bart; Isard, Peter; Prasad, Eswar

doi:10.5089/9781557757227.084

Cited by 39 publications

(6 citation statements)

References 58 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…21 As we discuss in the following, overlapping generations models (particularly those that follow the Blanchard-Weil-Yaari formulation) provide theoretical underpinnings to evaluate this non-Ricardian behavior. Quantitative simulations using models with such characteristics-specifically, the IMF's Global Fiscal Model (GFM) described in Botman et al (2006) and Multimod (Faruqee et al 1998)-are consistent with a value between roughly 0.40 and 0.80. Moreover, when the US expands its net foreign liabilities as a result of a permanent change in its public debt, the absorption of new issuance by each region is calibrated (on the basis of net foreign asset holdings in recent years) by assigning 24 percent of new issuance by US to AS, and 38 percent to each of JE and RC.…”

mentioning

confidence: 83%

Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing

Faruqee¹,

Laxton²,

Muir³

et al. 2005

Self Cite

View full text Add to dashboard Cite

This paper re-examines the implications, risks, and attendant policies surrounding global rebalancing of current accounts through the lens of a dynamic, multi-region model of the global economy. In the baseline scenario, world macroeconomic imbalances of the early 2000s can be attributed to a combination of six related but distinct tendencies: (i)expansionary U.S. fiscal policy, (ii) declining rate of U.S. private savings, (iii) increased foreign demand for U.S. assets, particularly in Asia, (iv) strong productivity growth in emerging Asia, (v) lagging productivity growth in Japan and the euro area, and (vi) gaining export competitiveness in emerging Asia. The baseline projects stabilizing U.S. public and foreign debt (albeit at higher levels) and a gradual depreciation of the dollar, allowing the U.S. external deficit to gradually move to a sustainable level. An alternative scenario, involving a sudden portfolio reshuffling in the rest of the world, would result in higher U.S. real interest rates, a significantly weaker dollar, with harmful effects on U.S. (and possibly global) growth. More flexible exchange rates in emerging Asia can help reduce variability in both regional output and inflation. Other simulations consider the effects of U.S. fiscal adjustment, as well as growth-enhancing structural reforms in Europe and Japan.

show abstract

mentioning

confidence: 83%

Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing

Faruqee¹,

Laxton²,

Muir³

et al. 2005

Self Cite

View full text Add to dashboard Cite

show abstract

“…The import is then explained by domestic demand and by relative import prices. The IMF MULTIMOD model by Faruqee et al (1998) is based on the structural cointegrating vector autoregressive distributed lag (VARDL) model among 8 OECD countries. This model empirically evaluates the effects of the real exchange rate on the balance of payments.…”

Section: Review Of the Literaturementioning

confidence: 99%

German Exports: Impact on the Selected EU Countries

Juráček

2021

Review of Economic Perspectives

View full text Add to dashboard Cite

This research focuses on the impact of German exports on exports of the other selected EU countries. We used the Global VAR approach to build a robust trade model between 23 EU countries, the USA, and China. By stressing this model with different shocks, we were able to observe how exports of the EU countries react to German loss of competitiveness and decline of demand from Germany. Based on our simulation, we could identify countries which i. are Germany’s competitors and would benefit from German loss of competitiveness, ii. are tied with German trade so tightly that loss of German competitiveness would negatively affect their exports.

show abstract

“…There is little theoretical rationale for the wide cross‐country dispersion of the marginal propensity to consume estimates reported by these multi‐country studies. The extent of the cross‐country differences appears to be particularly large compared with those of calibrated models, such as the IMF's MULTIMOD (see Faruqee et al , 1998). In calibrated models, the marginal propensity to consume out of wealth is based on deep parameters such as the intertemporal elasticity of substitution in consumption, the real interest rate, the probability of death and taxation.…”

Section: Wealth Effects In Time‐series Datamentioning

confidence: 99%

The Stock Market, Housing and Consumer Spending: A Survey of the Evidence on Wealth Effects

Paiella

2009

Journal of Economic Surveys

View full text Add to dashboard Cite

Abstract. This paper examines the time-series and micro-econometric evidence on the relationship between stock and house prices and consumer spending. The time-series studies distinguish between short-run and long-run links between consumption, income and wealth. They allow us to identify which variables adjust to restore the long-run equilibrium in the case of a shock, and to determine the time taken by the adjustment process. The micro-econometric literature improves our understanding of the link between wealth and expenditure and distinguishes among the alternative hypotheses -of direct wealth effect, common causality and collateral channel -that have been proposed to explain this relationship. The relationship between wealth and consumer spending appears to be strong, but there is some disagreement as to its size and nature. Furthermore, there appear to be some important differences across countries, which should be allowed for by policy makers when appraising the policy implications of a change in asset prices.

show abstract

Multimod Mark III: The Core Dynamic and Steady State Model

Cited by 39 publications

References 58 publications

Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing

Smooth Landing or Crash? Model-Based Scenarios of Global Current Account Rebalancing

German Exports: Impact on the Selected EU Countries

The Stock Market, Housing and Consumer Spending: A Survey of the Evidence on Wealth Effects

Contact Info

Product

Resources

About