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EUROMON: The multi-country model of De Nederlandsche Bank

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  • Demertzis, Maria
  • Van Els, Peter
  • Grob, Sybille
  • Peeters, Marga

Abstract

This Occasional Study wraps up the modelling work that has been done in recent years regarding DNB’s multi-country model EUROMON. It offers a description of the current version of the model and provides information about its simulation properties through the analysis of variety of standard scenarios. EUROMON is an estimated multi-country model. The current version includes 13 individual country models plus a trade block providing the international linkages between these countries. The 13 countries are the EMU-participants Germany, France, Italy, Spain, the Netherlands, Belgium, Austria and Finland, the EU-countries of the United Kingdom, Sweden and Denmark, plus the United States and Japan. The country models all share the same basic structure. Differences mainly relate to distinct values of model parameters and speeds of adjustment, and in some cases to slightly different specifications of equations in order to allow for specific institutional features of individual countries. EUROMON is a neo-Keynesian model in spirit, combining a vertical supply curve in the long run with an important role for demand factors in the short-run determination of output. The model incorporates a wage bargaining framework which makes the long-run supply curve dependent on real factors, such as tax policies. EUROMON is an aggregate model, with no further breakdown in sectors or categories of goods and services. The current version of the model is backward-looking. The study concludes by addressing the main shortcomings and strong features of the model that require further attention.

Suggested Citation

  • Demertzis, Maria & Van Els, Peter & Grob, Sybille & Peeters, Marga, 2006. "EUROMON: The multi-country model of De Nederlandsche Bank," MPRA Paper 28512, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:28512
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    References listed on IDEAS

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    Cited by:

    1. Peeters, Marga & Den Reijer, Ard, 2011. "On wage formation, wage flexibility and wage coordination : A focus on the wage impact of productivity in Germany, Greece, Ireland, Portugal, Spain and the United States," MPRA Paper 31102, University Library of Munich, Germany.
    2. Marga Peeters & Ard den Reijer, 2014. "Coordination versus flexibility in wage formation: a focus on the nominal wage impact of productivity in Germany, Greece, Ireland, Portugal, Spain and the United States," Applied Economics, Taylor & Francis Journals, vol. 46(7), pages 698-714, March.
    3. Marga Peeters, 2011. "Modelling unemployment in the presence of excess labour supply," Journal of Economics and Econometrics, Economics and Econometrics Society, vol. 54(2), pages 58-92.
    4. Peeters, Marga, 2011. "Demographic pressure, excess labour supply and public-private sector employment in Egypt - Modelling labour supply to analyse the response of unemployment, public finances and welfare," MPRA Paper 31101, University Library of Munich, Germany.

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    More about this item

    Keywords

    macro econometric multi-country model; shocks; monetary; fiscal; output gap; supply;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • C5 - Mathematical and Quantitative Methods - - Econometric Modeling
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook

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