Welcome to the big leagues! This course will provide a tour through the development of state-of-the-art semi- structural and DSGE models. These are Overlapping Generations (OLG) models with well-defined steady states, where we can study among other things the transitional dynamics from one steady state with low levels of
government debt to steady states with much higher levels of government debt. Participants will be taught how to think through the economics of large-scale DSGE models like Global Integrated Monetary and Fiscal Model (GIMF) as well as semi-structural models like MULTIMOD and Flexible System of Global Models (FSGM).

Participants will also be given a crash course on understanding divide-and-conquer strategies to solve mixed-
complementarity problems that involve nasty occasionally-binding constraints. Examples of occasionally-binding
constraints include the Effective Lower Bound (ELB) on the Policy Rate as well as potentially efficient
unconventional policy strategies that are designed to replace the policy space that is lost by hitting the ELB.

The course will be partly hands on showing participants how to build closed-economy and open-economy models in f DYNARE.

 

Day 1. Introduction to Dynare. Model Solution Techniques.

​

Day 2. On Designing and Building a DSGE Model.

​

Day 3. Steady-States and Calibration of Models.

 

Day 4. The Global Integrated Monetary and Fiscal Model (GIMF)

​

Day 5. Life-Cycles, Dynasties, Saving: Implications for Closed and Small, Open Economies

 

​

This course will last 5 days. Participants will have access to 2 hours of training each day. The courses are organized to focus on the needs of each central bank. 

​

Don't worry! We will find a suitable time of the day for you. Participants will be divided into groups by their time zones.

​

​

The outcomes from the course:

​

• Certificate of completion.

• Further assistance (subject to discussion).

​

Reading Material

​​​

• Adjemian, S., Bastani, H., Juillard, M., Karamé, F., Mihoubi, F., Mutschler, W., Pfeifer, J., Ratto, M., Rion, N. and Villemot, S. (2022), "Dynare: Reference Manual, Version 5", Dynare Working Papers, 72.

​

• Adrian T, D. Laxton, and M. Obstfeld 2018, "Advancing the Frontiers of Monetary Policy."

​

• Zoli, E., D. Laxton, S. Mursula, H. Wang, and J. Yao, 2018, “A New Strategy for Korea’s Fiscal Policy in a Low-Growth Environment,” Republic of Korea: Selected Issues, IMF Country Report, No. 18/41. 

​

• Zoli, E., D. Laxton, S. Mursula, H. Wang, and J. Yao, 2018, “A New Strategy for Korea’s Fiscal Policy in a Low-Growth Environment,” IMF Working Paper 18/91

 

• Andrle, M., P. Blagrave, P. Espaillat, K. Honjo, B. Hunt, M. Kortelainen, R. Lalonde, D. Laxton, E. Mavroeidi, D. Muir, S. Mursula, S. Snudden , 2015, "The Flexible System of Global Models - FSGM"  IMF Working Paper No. 15/64.

​

• Kortelainen M., D. Laxton and J. Selody 2014, "Fiscal Adjustment, Growth and Imbalances," in C. Cottarelli, P. Gerson and A. Senhadji (eds.), Post-Crises Fiscal Policy, MIT Press, pp. 535–549.

​

• Kortelainen M., D. Laxton and J. Selody 2014, "Coordination of Fiscal and Monetary Policies," in C. Cottarell, P. Gerson and A. Senhadji (eds.), Post-Crises Fiscal Policy, MIT Press, pp. 373–391.

​

• Kumhof, M., D. Laxton, 2013, "Fiscal Deficits and Current Account Deficits," Journal of Economic Dynamics & Control, Volume 37 (2013), Pages 2062-2082.

​

• Anderson, D., B. Hunt, M. Kortelainen, M. Kumhof, D. Laxton, D. Muir, S. Mursula, and S. Snudden. 2013, "Getting to Know GIMF – The Simulation Properties of the Global Integrated Monetary and Fiscal Model," IMF Working Paper No. 13/55.

​

• Coenen,G., C. Erceg, C. Freedman, D. Furceri, M. Kumhof, R. Lalonde, J. Linde, A. Mourougane, D. Muir, S. Mursula, J. Roberts, W. Roeger, C. de Resende, S. Smudden, M. Trabandt, in 't Veld, J. "Effects of Fiscal Stimulus in Structural Models, IMF Working Paper 10/73 (March 2010).

​

• Freedman,C., M. Kumhof, D. Laxton, D.Muir, and S. Mursula, 2010, "Global Effects of Fiscal Stimulus During the Crisis," Journal of Monetary Economics, Bol. 57 (June), pp. 506-526, available at http://www.sciencedirect.com/science

​

• Kumhof, M., D. Laxton, D. Muir and S. Mursula, 2010, "The Global Integrated Monetary Fiscal Model (GIMF)---Theoretical Structure", IMF Working Paper 10/34 (February 2010)

​

• Kumhof, M. and D. Laxton, 2009, Simple, Implementable Fiscal Policy Rules, IMF Working Paper 09/76 (April 2009).

​

• Hunt, B. and D. Laxton, 2003b, Some Simulation Properties of the Major Euro Area Economies in MULTIMOD, IMF Working Paper 03/31 (February 2003).

​

• Laxton, Douglas, 1998, MULTIMOD Mark III: The Equations and Documentation."

​

• Laxton, Douglas, Hamid Faruqee, Hamid, Peter Isard, Eswar Prasad, and Bart Turtelboom, 1998, MULTIMOD Mark III: The Core Dynamic and Steady-State Models, IMF Occasional Paper, No. 164, May, (Washington: International Monetary Fund).

​

• Laxton, Douglas, Hope Pioro, and Peter McAdam, 1996, “Solving MULTIMOD with First-Order and Newton-Based Techniques,” released as a University of Strathclyde Discussion Paper in Economic Modeling, October.

​

• Frank Smets & Raf Wouters, 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1123-1175, September.

​