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MUSE: The Bank of Canada's New Projection Model of the U.S. Economy




Staff projections provided for the Bank of Canada's monetary policy decision process take into account the integration of Canada's very open economy within the global economy, as well as its close real and financial linkages with the United States. To provide inputs for this projection, the Bank has developed several models, including MUSE, NEUQ (the New European Quarterly Model), and BoC-GEM (Bank of Canada Global Economy Model), to analyze and forecast economic developments in the rest of the world. The authors focus on MUSE, the model currently used to describe interaction among the principal U.S. economic variables, including gross domestic product, inflation, interest rates, and the exchange rate. Brief descriptions are also provided of NEUQ and BoC-GEM.

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  • Marc-André Gosselin & René Lalonde & Nicolas Parent, 2006. "MUSE: The Bank of Canada's New Projection Model of the U.S. Economy," Bank of Canada Review, Bank of Canada, vol. 2006(Autumn), pages 19-31.
  • Handle: RePEc:bca:bcarev:v:2006:y:2006:i:autumn06:p:19-31

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    References listed on IDEAS

    1. Macdonald, Ryan, 2007. "Canadian and U.S. Real Income Growth Pre and Post 2000: A Reversal of Fortunes," Economic Analysis (EA) Research Paper Series 2007048e, Statistics Canada, Analytical Studies Branch.
    2. Fagerberg, Jan, 2000. "Technological progress, structural change and productivity growth: a comparative study," Structural Change and Economic Dynamics, Elsevier, vol. 11(4), pages 393-411, December.
    3. Daniel S. Hamermesh & Gerard A. Pfann, 1996. "Adjustment Costs in Factor Demand," Journal of Economic Literature, American Economic Association, vol. 34(3), pages 1264-1292, September.
    4. Jeannine Bailliu & Michael R. King, 2005. "What Drives Movements in Exchange Rates?," Bank of Canada Review, Bank of Canada, vol. 2005(Autumn), pages 27-39.
    5. Robert Lafrance & Lawrence L. Schembri, 2000. "The Exchange Rate, Productivity, and the Standard of Living," Bank of Canada Review, Bank of Canada, vol. 1999(Winter), pages 17-28.
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