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Modeling with Macro-Financial Linkages; Credit and Policy Shocks in Emerging Markets


  • Jaromir Benes
  • Inci Ötker
  • David Vávra


This paper develops a stylized, small, open economy macro model that incorporates an explicit and non-trivial role for financial intermediation. It illustrates how such a model could be used for policy analysis in an emerging market economy where policymakers are concerned about risks associated with rapid credit growth, financial dollarization, and foreign borrowing, while lacking traditional tools to effect monetary policy transmission, and hence could resort to more direct instruments, such as foreign exchange market intervention and regulatory and administrative measures. Calibrating the model to a stylized emerging European economy, the paper simulates real and financial sector implications of various external and policy-related shocks that could be used as input for monetary policy making.

Suggested Citation

  • Jaromir Benes & Inci Ötker & David Vávra, 2009. "Modeling with Macro-Financial Linkages; Credit and Policy Shocks in Emerging Markets," IMF Working Papers 09/123, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:09/123

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    References listed on IDEAS

    1. Willman, Alpo, 2002. "Euro area production function and potential output: a supply side system approach," Working Paper Series 0153, European Central Bank.
    2. International Monetary Fund, 2010. "Estimating Potential Output with a Multivariate Filter," IMF Working Papers 10/285, International Monetary Fund.
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    Cited by:

    1. Vít Pošta & Zdeněk Pikhart, 2015. "Financial Risk and Real Variables: Evidence Based on a SVAR Analysis of the Czech Economy," Prague Economic Papers, University of Economics, Prague, vol. 2015(5), pages 516-537.
    2. repec:prg:jnlpep:v:2015:y:2015:i:5:id:513:p:1-22 is not listed on IDEAS
    3. Jan Vlcek & Scott Roger, 2012. "Macrofinancial Modeling At Central Banks; Recent Developments and Future Directions," IMF Working Papers 12/21, International Monetary Fund.
    4. repec:prg:jnlpep:v:preprint:id:513:p:1-22 is not listed on IDEAS


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