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This presents properties of the fifth version of the EPA World Economic Model constructed by the Economic Research Institute of the Economic Planning Agency (Government of Japan). They are indicated by multipliers of major policy shocks under the full-linked system.
The multipliers of former versions of the EPA World Economic Model are to be referred to those of the February 1982 version (EPA World Econometric Model Discussion Paper, No. 11, Vol. II, "Simulation Tests"), the February 1984 version (EPA World Econometric Model Discussion Paper, No. 16, Vol. III, "Multiplier Analyses [Detailed]"), the July 1987 version (EPA World Econometric Model Discussion Paper, No. 18, Vol. II, "Multipliers"), and the January 1991 version (EPA World Econometric Model Discussion Paper, No. 19, Vol. II, "Multipliers").
The model structures are included in Vol. I of this discussion paper, No. 20.
As progress is made on the improvement of the model, this version will be occasionally revised.
Edited by the Group of the EPA World Economic Model, Economic Research Institute, Economic Planning Agency, Government of Japan.
| Introduction-------------------------------------------------------------------- | 1 | (383KB) |
| Part I. Domestic and International Effects of Fiscal and Monetary Policy by Country------------------------------------------------------- | 5 | |
| A. Effects of fiscal policy: a sustained increase in real government expenditure by 1% of real GDP-------------------- | 7 | |
| B. Effects of monetary policy: a sustained decrease in short-term interest rate by 1% point-------------------------------- | 14 | |
| Part II. Domestic Effects of Fiscal and Monetary Policy by Country------------ | 21 | |
| A. Effects of fiscal policy: a sustained increase in real government expenditure by 1% of real GDP-------------------- | 23 | |
| B. Effects of monetary policy: a sustained decrease in short-term interest rate by 1% point----------------------------------- | 50 | |
| Part III. Effects on the Major Three Countries (US, Japan, and Germany) and World Economy of Fiscal and Monetary Policy by the Major Three Countries (US, Japan, and Germany)------------------ | 77 | |
| A. Effects of fiscal policy: a sustained increase in real government expenditure by 1% of real GDP---------------------- | 79 | |
| B. Effects of monetary policy: a sustained decrease in short-term interest rate by 1% point----------------------------------- | 100 | |
| Part IV. Effects on the Major Two Countries (US and Japan) and World Economy of Fiscal and Monetary Policy by the Major Two Countries (US and Japan)------------------------------ | 121 | (340KB) |
| A. Effects of fiscal policy: a sustained reduction of income tax by 1% of nominal GDP------------------------------------ | 123 | |
| B. Effects of monetary policy: a sustained increase in money supply by 1%-------------------------------------------------- | 137 | |
| C. Effects of monetary policy: a sustained decrease in official discount rate by 1% point-------------------------------------- | 158 | |
| Part V. Effects of Exchange Rate Changes-------------------------------------- | 173 | |
| A. Effects of a depreciation of the US dollar against the other currencies by 10% on the US, Japan, Germany, and World Economy- | 175 | |
| B. Effects of a depreciation of the yen against the US dollar by 10% on Japan and World Economy------------------ | 185 | |
| C. Effects of a depreciation of the Deutschmark against the US dollar by 10% on Germany and World Economy-------------- | 189 | |
| Part VI. Effects on the Major Three Countries (US, Japan, and Germany) of a Sustained Oil Price Increase by 20%--------------------------------- | 193 | |
| Part VII. Effects of Self-Restraint of Export in Japan on the Major Two Countries (US and Japan)----------------------------------------- | 205 | |
| Annex: Domestic Effects of Fiscal and Monetary Policy by Isolated Country Model------------------------------------------------- | 213 |
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