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Structuring a Money Market Model for Fiscal Policy Analysis
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Structuring a Money Market Model for Fiscal Policy Analysis
Structuring a Money Market Model for Fiscal Policy Analysis
Journal Article

Structuring a Money Market Model for Fiscal Policy Analysis

1980
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Overview
One of the principal uses for the Bureau of Economic Analysis (BEA) quarterly econometric model of the U.S. economy is the analysis of alternative fiscal policies. Because multiplier analyses of the BEA model structure indicate that monetary policy variables exert a significant quantitative impact, analyses of the impact of alternative fiscal policies depend critically on the values of the monetary policy variables [3]. The Federal Reserve System (FRS) has actively responded to changes in economic conditions in setting these monetary policy variables. Therefore, to obtain an internally consistent analysis of alternative fiscal policies, FRS reaction to the changes in basic economic conditions generated by these alternative policies...