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GTAP Resources: Resource Display

GTAP Resource #6257

"Monetary policy in a CGE model"
by Galindev, Ragchaasuren and Bernard Decaluwé

This paper aims to develop a CGE model with an explicit monetary policy rule which replaces typical exogenous numeraire so that the model can have endogenous absolute price. A model with exogenous numeraire can be derived as a special case of the current model through a flexible parameterization. It shows that in the presence of nominal rigidities, simulation results for the same shock can be different depending on the choice of numeraire. The current model also gives different results for the same shock by creating inflation. The paper highlights the importance of choosing numeraire or considering the interest rate rule instead of fixed numeraire in the presence of nominal rigidities.

Resource Details (Export Citation) GTAP Keywords
Category: 2021 Conference Paper
Status: Not published
By/In: Presented during the 24th Annual Conference on Global Economic Analysis (Virtual Conference)
Date: 2020
Created: Galindev, R. (4/13/2021)
Updated: Galindev, R. (5/30/2021)
Visits: 327
- Baseline development

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