Business Intelligence

A Small Quarterly Multi-Country Projection Model

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Executive Summary

This paper is being written as part of a larger project to estimate a small quarterly Global Projection Model (GPM). The GPM project is designed to improve the toolkit for studying both own-country and cross-country linkages. In this paper, the authors estimate a small quarterly projection model of the US, Euro Area, and Japanese economies. The model is estimated with Bayesian techniques, which provide a very efficient way of imposing restrictions to produce both plausible dynamics and sensible forecasting properties. The authors show how the model can be used to construct efficient baseline forecasts that incorporate judgment imposed on the near-term outlook.

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