GTAP Resources: Resource Display
| GTAP Resource #4668 |
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"Some short run dynamics for a CGE model" by Wiskich, Tony Abstract This paper presents an approach designed to strengthen and extend short run analysis in dynamic real CGE models. Key changes relate to the labour market, capital utilisation and exchange rates. The approach is made as simple as possible for ease of implementation, yet is able to broadly replicate key results from estimated macro-econometric models of Australia. The benefits of the approach include: the exchange rate follows well established interest parity dynamics, generally leading to more muted responses consistent with other studies; model extension by inclusion of nominal variables, allowing consideration of monetary policy and the zero lower bound, for example; better alignment with the literature of output responses for exchange rate and terms of trade shocks, in part through a Phillips curve allowing counter movements between real wages and employment; and fiscal multipliers more in line with literature estimates, both in magnitude and in variation with the business cycle. The approach adds some complexity to existing models and demands forward-looking behaviour for exchange rates. |
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- Dynamic modeling - Model validation and sensitivity analysis - Economic crisis - Economic growth - Labor market issues - Oceania |
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Public Access No documents have been attached. Restricted Access No documents have been attached. Special Instructions No instructions have been specified. |
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Last Modified: 9/15/2023 2:05:45 PM
