In this paper, stochastic simulations of the Reserve Bank of New Zealand's new macroeconomic model, FPS, are used to examine the issue of which price index monetary policy should stabilise in a small open economy. Under the class of policy rules considered, targeting a measure of domestic...

Simple rules for guiding monetary policy actions have been shown to achieve policy objectives effectively. In many of these simple rules, policy prescriptions depend on the economy's level of potential output. However, potential output is unobservable and is estimated with uncertainty. We...

This paper uses two of the IMF's structural macroeconomic models to estimate the potential global impact of the boom in unconventional oil and natural gas in the United States. The results suggest that the impact on the level of U.S. real GDP over roughly the next decade could be significant,...

The paper uses MULTIMOD to examine the implications of uncertain exchange rate pass-through for the conduct of monetary policy. From the policymaker''s perspective, uncertainty about exchange rate pass-through implies uncertainty about policy multipliers and the impact of state variables on...

Using a variant of the IMF''s Global Economy Model (GEM), featuring energy as both an intermediate input into production and a final consumption good, this paper examines the macroeconomic implications of large increases in the price of energy. Within a fully optimizing framework with nominal...