A Global Projection Model for Euro Area Large Economies

32 Pages Posted: 14 Apr 2015

See all articles by Zoltan Jakab

Zoltan Jakab

International Monetary Fund

Pavel Lukyantsau

International Monetary Fund (IMF)

Shengzu Wang

International Monetary Fund (IMF) - Asia and Pacific Department

Date Written: March 2015

Abstract

The GPM project is designed to improve the toolkit for studying both own-country and cross-country linkages. This paper creates a special version of GPM that includes the four largest Euro Area (EA) countries. The EA countries are more vulnerable to domestic and external demand shocks because adjustments in the real exchange rate between EA countries occur more gradually through inflation differentials. Spillovers from tight credit conditions in each EA country are limited by direct trade channels and small confidence spillovers, but we also consider scenarios where banks in all EU countries tighten credit conditions simultaneously.

Keywords: Economic forecasting, Germany, France, Italy, Spain, Euro Area, Spillovers, General equilibrium models, Global projection model, inflation, interest rate, economies, demand, exchange rate, real exchange rate

JEL Classification: C53, F41, O52

Suggested Citation

Jakab, Zoltan and Lukyantsau, Pavel and Wang, Shengzu, A Global Projection Model for Euro Area Large Economies (March 2015). IMF Working Paper No. 15/50, Available at SSRN: https://ssrn.com/abstract=2594134

Zoltan Jakab (Contact Author)

International Monetary Fund ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Pavel Lukyantsau

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Shengzu Wang

International Monetary Fund (IMF) - Asia and Pacific Department ( email )

700 19th Street NW
Washington, DC 20431
United States

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