nep-cmp New Economics Papers
on Computational Economics
Issue of 2006‒11‒25
one paper chosen by
Stan Miles
Thompson Rivers University

  1. SIGMA: A New Open Economy Model for Policy Analysis By Erceg, Christopher; Guerriei, Luca; Gust, Christopher

  1. By: Erceg, Christopher; Guerriei, Luca; Gust, Christopher
    Abstract: In this paper, we describe a new multicountry open economy SDGE model named "SIGMA" that we have developed as a quantitative tool for policy analysis. We compare SIGMA's implications to those of an estimated large-scale econometric policy model (the FRB/Global model) for an array of shocks that are often examined in policy simulations. We show that SIGMA's implications for the near-term responses of key variables are generally similar to those of FRB/Global. Nevertheless, some quantitative disparities between the two models remain due to certain restrictive aspects of SIGMA's optimization-based framework. We conclude by using long-term simulations to illustrate some areas of comparative advantage of our SDGE modeling framework.
    JEL: G00 G0
    Date: 2006–01–13

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