Repository of macro models
This repository contains descriptions of macro-models which relate to papers published or forthcoming in Economic Modelling
A real-financial computable general equilibrium (CGE) model for fiscal and monetary policy analysis
Title of Paper: Trade-offs in Stabilisation: A Real-Financial CGE Analysis with reference to India
Author: C.W.M. Naastepad, Department of Economics, Utrecht University, The Netherlands
Vol./Issue No.: scheduled for 18/-
Short description: This paper offers a novel real-financial CGE model which is used to provide insight into the macroeconomic effects of stabilisation policy in India. Focussing on credit rather than money, and explicitly analysing the relation between the budget and the credit creation process, the model goes beyond earlier modelling approaches by (1) incorporating credit rationing, (2) recognising the dual role of credit for working capital and investment and (3) allowing for switches between credit-constrained, capacity-constrained and demand-constrained regimes. Results of experiments with this model show that the macroeconomic effects of a reduction of the budget deficit depend crucially on the interaction of three factors, viz. (1) the manner in which the deficit is reduced, (2) sectoral supply and demand conditions in the economy at hand and (3) the credit creation process.
JEL classification: C68; E61; E63; O23
Keywords: Computable General Equilibrium Models; Credit Rationing; Fiscal and Monetary Policy Design and Consistency; Fiscal and Monetary Policy in Development
Country: India
Linkage address: http://www.econ.uu.nl/indiacge.pdf
Disclaimer: Responsibility for the full model structures of the models in this repository rests solely with the authors.