The Spanish Block of the Escb-Multi-Country Model

The Dutch Block of the Escb Multi-Country Model

“…In order to obtain a stationary gap, we have adjusted the latter with a deterministic term, denoted by t a . 2 The gaps between the current values and the long run targets play a crucial role in the estimation of the short run dynamic behavioral equation as they serve to construct the error correction terms, which has to be mean stationary. Finally, the desired level of the capital stock that we used in the short run regressions of the model is in the form:…”

“…This paper describes the Dutch block of the ESCB Multi-Country Model (MCM) for the euro area. The model is standard in the tradition of the ECB Area-Wide Model and follows the specification of other MCM blocks (AWM, see Fagan et al 2001, Boissay and Villetelle 2005, Willman and Estrada 2002. In these models, the supply-side determines the long run equilibrium, with long run prices fully adjusting, whereas the short run output is determined by the demand side, with a sluggish adjustment of prices and quantities towards equilibrium.…”

The Italian Block of the Escb Multi-Country Model

“…This model is used regularly as an input into Eurosystem projection exercises and, to a lesser extent, in simulation analysis. The specification of the Italian model follows closely (in terms of specification and accounting framework) that of the Area-Wide Model (AWM) and indeed the other MCM country blocks (e.g., Willman and Estrada, 2002;Boissay and Villetelle, 2005;Angelini, Boissay, and Ciccarelli, 2006). 1 Consequently, and necessarily, this paper closely follows the exposition of other MCMs published so far.…”

“…Typical long-run features and closures incorporated into macro models are discussed further inMcAdam (1999).3 Given the existing literature on the MCM framework, the subsequent sections closely follow the treatment inWillman and Estrada (2002) and, more recently, Angelini,andBoissay and Villetelle (2005).…”