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Simulations with the AEAF Мodel

Author

Listed:
  • Anthonie Knoester
  • Nico van der Windt

Abstract

The main purpose of this paper is to be of assistance in understanding the working of the AEAF model. To this end we will explain in section 2 how in the simulations levels and percentages changes are treated as well as the important difference between stocks and flows. Section 3 deals with the consequences of linking the block of the real sector with that of the monetary sector. This is demonstrated with a sensitivity analysis in which we compare a policy simulation made with the complete AEAF model with the one that is obtained from the real block only. Section 4 discusses the major mechanisms that are at work in the model. Their importance for the outcomes of the AEAF model will be demonstrated with two sensitivity analysis viz. on the one hand the exclusion of the Philips curve mechanism and on the other hand the exclusion of the shifting forward of taxation from the wage equation. The paper ends with some concluding remarks in section 6.

Suggested Citation

  • Anthonie Knoester & Nico van der Windt, 2003. "Simulations with the AEAF Мodel," Working paper series 42003en, Agency for Economic Analysis and Forecasting.
    • Handle: RePEc:eaf:wpaper:42003en
    as

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    References listed on IDEAS

    as
    1. Stanimir Barzashki, 1992. "Employment and Unemployment in the Process of Stabilization," Working paper series 61992en, Agency for Economic Analysis and Forecasting.
    2. Knoester, Anthonie & van der Windt, Nico, 1987. "Real Wages and Taxation in Ten OECD Countries," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 49(1), pages 151-169, February.
    3. Anthonie Knoester & Nico van der Windt, 2003. "The Need for Economic Models in Economic Policy Making," Working paper series 32003en, Agency for Economic Analysis and Forecasting.
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    More about this item

    Keywords

    AEAF model; simulations; Bulgaria;
    All these keywords.

    JEL classification:

    • E17 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Forecasting and Simulation: Models and Applications
    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General

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