Repository of macro models
This repository contains descriptions of macro-models which relate to papers published or forthcoming in Economic Modelling
A monthly model of the interaction between the economies of the US and Western Europe during the interwar years
Title of Paper: A monthly model of the interaction between the economies of the US and Western Europe during the interwar years
Authors:
James Foreman-Peck, HM Treasury, London, U.K.
Andrew Hughes Hallett, University of Strathclyde and CEPR, U.K.
Yue Ma, Lingnan University, Hong Kong
Vol./Issue No.: 17/4, pp. 515-544
Short description: The four national economies are represented with essentially the well-tried IS-LM formulation. Each national model has four markets (goods, money, labour, foreign trade) and four sets of agents (consumers, producers, labour and banks). The money supply is driven by the commercial banks, making advances on a given monetary base according to the level of the discount rate set by the central bank. The monetary base itself is allowed to vary to some extent independently of the gold stock, as was usual under the gold exchange standard. We link the economies with three types of international transmission, by prices, interest rates and trade volumes. Expectations are taken into account through the forward exchange rate and lagged variables. The full multi-country model consists of 99 behavioural equations and identities estimated on monthly data from the period January l927 to December l936, by ordinary least squares.
JEL classification: C5; N1; F4
Keywords: Multicountry model; Optimal strategic policies; Great Depression
Country: Britain, France, Germany and the United States
Linkage address: http://scottie.stir.ac.uk/~yma01/interwar
Disclaimer: Responsibility for the full model structures of the models in this repository rests solely with the authors.