What have we learned from linked econometric models? A comparison of fiscal-policy simulations
Keywords:Fiscal policy, international transmission effects, econometric model
As part of a previous study, the authors examined a number of simulations based on various econometric models that link two or more sub-models of individual countries. However, the models did not reach consensus in their attempts to quantify economic interdependence and therefore no firm conclusions could be drawn. In the present work, the authors take a further look at some of these simulation results, with the objective of evaluating the contribution that they have made to understanding the international economy. Specifically, the linked simulation results are compared with a set of very simple calculations made of the international transmission effects of fiscal policy.
JEL: E62, F42, E27