Translation. Region: Russian Federal
Source: Central Bank of Russia –
An important disclaimer is at the bottom of this article.
The Bank of Russia has created and uses a set of models for medium-term forecasting, based on various versions of the New Keynesian model of dynamic stochastic general equilibrium. In their structure, they have many common features with the models used by other central banks that have successfully implemented inflation targeting policies for a long time. At the same time, the models take into account the features of the transmission mechanism of monetary policy in Russia and the macroeconomic policy being pursued (in particular, the mechanism of the budget rule).
This group of models includes the quarterly forecast model (QFM), which is a flexible tool for analyzing a wide range of scenario forecast variations. Dynamic stochastic general equilibrium models (DSGE) of a small open economy with a budget sector, banking sector, etc., allow obtaining additional estimates of forecast trajectories, as well as taking into account structural prerequisites not explicitly reflected in the QFM.
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