The U.K. Sector of the Federal Reserve's Multicountry Model: The Effects of Monetary and Fiscal Policies

Abstract

The purpose of this paper is to describe and to analyze in some detail the U.K. sector of the Federal Reserv e's Multicountry Model (MCM). The analysis focuses on the effects of shifts in U.K. monetary and fiscal policies at three levels: (1) within the unlinked U.K. sector, (2) within the linked MCM framework, and (3) within thelinked MCM under the assumption that U.K. policy shifts are synchronized with those in the MCM ot her countries. The contrast between linked and unlinked simulation illustrates t he importance ofinternational feedback effects. Copyright 1986 by Blackwell Publishers Ltd and The Victoria University of Manchester