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EUROMON: De Nederlandsche Bank's Multi-Country Model

Author

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  • M. Demertzis
  • P.J.A. van Els
  • H.M.M. Peeters

Abstract

The paper presents a guide to the theoretical properties of EUROMON, the Nederlandsche Bank's multi-country model for implementing policy analysis. It is written with a view to expanding Chapter 2 of the DNB Monetary Monograph 19, which provides for a model description. EUROMON is an aggregate neo-Keynesian model where output is described in the long run by a vertical supply curve, but is strongly affected by demand factors in the short run. At the same time, the model incorporates a wage bargaining framework which makes the long-run equilibrium unemployment rate dependent on real factors (for example tax policies and terms of trade).Our future use of the model will require further strengthening of internal theoretical consistencies, including the introduction of forward looking elements. We present four indicative simulations that summarise the properties of the model.

Suggested Citation

  • M. Demertzis & P.J.A. van Els & H.M.M. Peeters, 2002. "EUROMON: De Nederlandsche Bank's Multi-Country Model," WO Research Memoranda (discontinued) 718, Netherlands Central Bank, Research Department.
  • Handle: RePEc:dnb:wormem:718
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    References listed on IDEAS

    as
    1. H.M.M. Peeters & A.H.J. den Reijer, 2001. "On Wage Formation, Wage Development and Unemployment," WO Research Memoranda (discontinued) 677, Netherlands Central Bank, Research Department.
    2. Jeanfils, P., 2000. "A Model with Explicit Expectations for Belgium," Papers 4, Warwick - Development Economics Research Centre.
    3. G. Coenen & J.-L. Vega, 2001. "The demand for M3 in the euro area," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 16(6), pages 727-748.
    4. repec:imf:imfops:164 is not listed on IDEAS
    5. H.M.M. Peeters & A.H.J. den Reijer, 2002. "On Wage Formation, Wage Development and Unemployment Flexibility: a Comparison between European Countries and the United States," WO Research Memoranda (discontinued) 712, Netherlands Central Bank, Research Department.
    6. Martin M.G. Fase, 1998. "On Money and Credit in Europe," Books, Edward Elgar Publishing, number 1550.
    7. Jørgen Elmeskov, 1993. "High and Persistent Unemployment: Assessment of the Problem and Its Causes," OECD Economics Department Working Papers 132, OECD Publishing.
    8. W. Bolt & P.J.A. van Els, 1998. "Output gap and inflation in the EU," WO Research Memoranda (discontinued) 550, Netherlands Central Bank, Research Department.
    9. Raymond Torres & John P. Martin, 1989. "Potential Output in the Seven Major OECD Countries," OECD Economics Department Working Papers 66, OECD Publishing.
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    Cited by:

    1. Maria Demertzis & Peter van Els & Sybille Grob & Marga Peeters, 2006. "EUROMON: the multi-country model of De Nederlandsche Bank," DNB Occasional Studies 401, Netherlands Central Bank, Research Department.

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    More about this item

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E2 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment

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