Overview

ENDOCRED is a core course offered by the Better Policy Project, focused on understanding and managing monetary policy credibility in real-world policy environments.

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It introduces a semi-structural modeling framework in which credibility is treated as an endogenous outcome—shaped by policy decisions, expectations, institutional behavior, and fiscal conditions.

A central feature of the course is the explicit treatment of fiscal dominance and its role in weakening monetary policy credibility.

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Why This Course Matters

Central banks often operate with similar frameworks but achieve very different outcomes.

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The difference is credibility.

 

ENDOCRED provides a practical framework to:

- analyze how credibility is built or lost

- understand how expectations respond to policy

- design policies that remain effective under uncertainty

 

It focuses on the real-world problem: how policy mistakes, inconsistent actions, or fiscal pressures can unanchor expectations and reduce policy effectiveness.

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Credibility and Fiscal Dominance

Monetary policy credibility does not depend solely on central bank actions.

It is also shaped by the broader policy environment—particularly the presence of fiscal dominance.

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ENDOCRED explicitly incorporates scenarios where:

- fiscal pressures constrain monetary policy

- debt dynamics influence expectations

- policy trade-offs become more complex

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Participants simulate environments in which:

- fiscal dominance weakens policy effectiveness

- inflation expectations become less anchored

- central bank credibility deteriorates

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Credibility is a joint outcome of monetary and fiscal policy—not a feature of central bank design alone.

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Three-Level Certification Pathway

Three-Level Certification Pathway

• ENDOCRED I — Nonlinear Solution Methods, Credibility Dynamics, and Fiscal Dominance

• ENDOCRED II — Two-Country Open Economy Model in Dynare

• ENDOCRED III — Institutional Model Construction

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Participants must complete each level before progressing to the next. Certification reflects demonstrated competency in model construction, solution methods, and reporting.

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Module I — Nonlinear Solution Methods, Credibility Dynamics, and Fiscal Dominance

Participants work inside a custom Better Policy Project GPT environment running Newton-based stacked solution algorithms with homotopy safeguards. Within the core ENDOCRED framework credibility is treated as an endogenous policy outcome shaped by expectations, institutional behavior, and policy consistency. The module introduces nonlinear solution methods and examines how credibility evolves, how expectations become entrenched, and why restoring price stability can be costly when credibility has weakened. Special attention is given to fiscal dominance and monetary-fiscal interactions, showing how debt pressures and weak fiscal support can undermine policy effectiveness.

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Module II — Two-Country Open Economy Model in Dynare

All implementation is executed in Dynare (MATLAB or Octave). GPT-assisted code generation reduces friction in writing, debugging, and documenting Dynare files. Participants analyze exchange rate dynamics, external shocks, cross-border spillovers, and international policy transmission under imperfect credibility. The module also incorporates fiscal pressures and sovereign risk considerations, allowing participants to study how monetary-fiscal interactions affect inflation, expectations, and policy trade-offs in an open economy setting.

Each exercise produces a publication-quality LaTeX report including equations, calibration tables, policy experiments, and professionally formatted charts.

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Module III — Build Your Own Institutional Model

Participants construct a nonlinear policy model tailored to their institutional environment. Extensions may include financial-real linkages, endogenous risk premia, custom policy loss functions, and structured scenario analysis. The emphasis is on building a disciplined and transparent institutional framework capable of producing policy-ready charts, reports, and presentations for real-world decision-making.

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How the Course Works in Practice

This is not a traditional lecture-based course.

ENDOCRED is structured around a policy production workflow used in modern central banks:

1. Scenario Design

2. Model Simulation

3. Chart and Output Development

4. Narrative Construction

5. Policy Presentation

 

All outputs are designed to mirror real policy processes.

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Modeling Framework

Mixed Complementarity Problem (MCP) framework allowing:

- nonlinear policy responses

- regime changes

- credibility dynamics

- fiscal-monetary interactions

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Learning Outcomes

Participants will be able to:

- simulate credibility shocks and fiscal dominance scenarios

- evaluate policy strategies

- produce policy-ready outputs

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Who This Is For

- Central bank economists

- Policy analysts

- Advanced students

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Position Within the Program

Core module linking credibility, fiscal risks, and policy analysis.

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Methodological Discipline

Participants are trained to understand both the economic structure of their model and the numerical methods used to solve it. The objective is disciplined, transparent, and professional macroeconomic modeling.

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Continuous Schedule

Courses begin every Monday morning. Applications must be submitted by 6:00 PM London time on Mondays.

Applicants must submit a short written statement outlining their background, motivation, and intended application of the training.

Applicants receive a response by Wednesday of the following week with a proposed start date and onboarding details.

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Multi-Level Trainer System

Trainers operate at multiple levels of expertise. Complex methodological questions are escalated to senior experts in macroeconomic modeling to ensure institutional-grade standards.

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Pricing

Each module runs for four weeks (28 working days).

Individual Enrollment: Contact for pricing

Institutional Package: Custom pricing available

Full Program Bundle: Discounted access to all courses

The program includes:

• Full access to training materials, including model codes (ENDOCRED model: MPC framework)

• Access to the specialized Better Policy Project GPT assistant

• Python and Dynare tools

• Simulation templates

• Automated LaTeX reporting workflows

• Five hours of personalised trainer support (including onboarding session) for each module

• Additional one-on-one trainer hours for Module III available for purchase ​