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Prospects for the Use of DSGE Models by Finance Ministries: The Experience of Global Regulators

Author

Listed:
  • Samvel S. Lazaryan

    (Financial Research Institute, Moscow 127006, Russia)

  • Evgenii V. Mayorov

    (Financial Research Institute, Moscow 127006, Russia)

Abstract

The article provides the analysis of specific model choices of public institutions and international organizations. The authors determine that the majority of central banks in the sample use DSGE models. On the other hand, DSGE models are far less common in ministries of finances. Currently, ministries prefer to use so-called macroeconometric models (MM). International organizations such as the IMF and the OECD have a greater variability of models in use including both DSGE and MM. Based on the academic and practical experience of DSGE modeling the authors find that this type of models is perfectly suitable for the usage in a ministry of finances. The authors also propose that current model selection criteria should be enhanced with accordance to the benefits provided by DSGE modeling.

Suggested Citation

  • Samvel S. Lazaryan & Evgenii V. Mayorov, 2018. "Prospects for the Use of DSGE Models by Finance Ministries: The Experience of Global Regulators," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 5, pages 70-82, October.
    • Handle: RePEc:fru:finjrn:180506:p:70-82
    DOI: 10.31107/2075-1990-2018-5-70-82
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    More about this item

    Keywords

    forecast; macroeconomic modeling; macroeconometric models; general equilibrium models; fiscal policy; model criteria;
    All these keywords.

    JEL classification:

    • E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
    • E60 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - General

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