The Role of MULTIMOD in the IMF's Policy Analysis

This paper describes the basic structure, underlying philosophy, and key behavioral properties of MULTIMOD. It also focuses on several recent applications of macromodels in the IMF’s policy analysis, emphasizing that most questions put forward for analysis with models like MULTIMOD are initially posed in ways that cannot be addressed by simply pushing a computer key. Meaningful macromodel-based policy analysis requires a sensibly structured and parameterized macromodel, but it also generally requires considerable probing of the nature of the policy issues in order to reformulate policy questions in terms of well-defined exogenous shocks.Fund policies;Economic models;inflation, monetary policy, monetary fund, aggregate demand, price level, real interest rate, monetary targeting, monetary policy reaction functions, rates of inflation, inflation rate, nominal interest rate, monetary policy reaction function, monetary authorities, monetary policy regimes, real exchange rates, monetary policy instrument, macroeconomic stability, monetary authority of singapore, money balances, monetary authority, monetary policy framework, real rate of interest, inflation targeting, monetary policies, monetary policy rules, nominal variables, real interest rates, foreign exchange