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International Finance Discussion Papers
The International Finance Discussion Papers logo links to the International Finance Discussion Papers home page A Guide to FRB/Global
Andrew T. Levin, John H. Rogers, and Ralph W. Tryon

Abstract:  This paper describes the structure and illustrates the key features of FRB/Global, a large-scale macroeconomic model used in analyzing exogenous shocks and alternative policy responses in foreign economies and in examining the impact of these external shocks on the U.S. economy. FRB/Global imposes fiscal and national solvency constraints and utilizes error-correction mechanisms in the behavioral equations to ensure the long-run stability of the model. In FRB/Global, expectations play an important role in determining financial market variables and domestic expenditures. Simulations can be performed using either limited-information ("adaptive") or model-consistent ("rational") expectations.

Full paper (248 KB PDF)

Macroeconometric models, long-run stability, rational expectations, fiscal and monetary policy, European Monetary Union

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Last update: July 19, 2001