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The Bank of Canada's Version of the Global Economy Model (BoC-GEM)

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Author Info

  • Rene Lalonde
  • Dirk Muir

Abstract

The Bank of Canada's version of the Global Economy Model (BoC-GEM) is derived from the model created at the International Monetary Fund by Douglas Laxton (IMF) and Paolo Pesenti (Federal Reserve Bank of New York and National Bureau of Economic Research). The GEM is a dynamic stochastic general-equilibrium model based on an optimizing representative-agent framework with balanced growth, and some additional features to help mimic the overlappinggenerations' class of models. Moreover, there is a concrete role for fiscal policy (albeit not fully optimized) and monetary policy. At the Bank, the model has been extended beyond the standard version with tradable and non-tradable goods sectors to include both oil and non-oil commodities. Furthermore, the oil sector is decomposed into oil for production and oil for retail consumption. The authors provide a detailed technical description of the model's structure and calibration. They also describe the model's simulation properties for Canadian and U.S. domestic shocks, and describe how the model can be used to analyze issues that currently are at the forefront for the Canadian and global economies, such as trade protectionism, global imbalances, and increasing oil prices.

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Bibliographic Info

Paper provided by Bank of Canada in its series Technical Reports with number 98.

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Length: 121 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:bca:bocatr:98

Contact details of provider:
Postal: 234 Wellington Street, Ottawa, Ontario, K1A 0G9, Canada
Phone: 613 782-8845
Fax: 613 782-8874
Web page: http://www.bank-banque-canada.ca/

Related research

Keywords: Economic models; International topics; Business fluctuations and cycles;

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References

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Citations

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Cited by:
  1. Sandra Gomes & Pascal Jacquinot & Massimiliano Pisani, 2010. "The EAGLE. A model for policy analysis of macroeconomic interdependence in the euro area," Temi di discussione (Economic working papers) 770, Bank of Italy, Economic Research and International Relations Area.
  2. Lawrence L Schembri, 2010. "Discussion of Terms of Trade Shocks and Fiscal Cycles," RBA Annual Conference Volume, in: Renée Fry & Callum Jones & Christopher Kent (ed.), Inflation in an Era of Relative Price Shocks Reserve Bank of Australia.
  3. Selim Elekdag & René Lalonde & Douglas Laxton & Dirk Muir & Paolo Pesenti, 2007. "Oil Price Movements and the Global Economy: A Model-Based Assessment," Working Papers 07-34, Bank of Canada.
  4. Calista Cheung & Sylvie Morin, 2007. "The Impact of Emerging Asia on Commodity Prices," Working Papers 07-55, Bank of Canada.
  5. Michael Kumhof & Dirk Muir & Carlos de Resende & Jan in ‘t Veld & René Lalonde & Davide Furceri & Annabelle Mourougane & John Roberts & Stephen Snudden & Mathias Trabandt & Günter Coenen &, 2010. "Effects of Fiscal Stimulus in Structural Models," IMF Working Papers 10/73, International Monetary Fund.
  6. Gerlach, Petra & Merola, Rossana, 2013. "Consumption and Credit Constraints: A Model and Evidence for Ireland," Papers WP471, Economic and Social Research Institute (ESRI).
  7. Philipp Maier, 2008. "A Wave of Protectionism? An Analysis of Economic and Political Considerations," Working Papers 08-2, Bank of Canada.
  8. Ben Hunt, 2009. "The Declining Importance of Tradable Goods Manufacturing in Australia and New Zealand: How Much can Growth Theory Explain?," IMF Working Papers 09/16, International Monetary Fund.
  9. Camelia Madalina Orac & Florentin Caloian, 2013. "Using Gem - Global Economic Model In Achieving A Global Economic Forecast," Risk in Contemporary Economy, "Dunarea de Jos" University of Galati, Faculty of Economics and Business Administration, pages 54-60.

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