New Methods for Macro-Financial Model Comparison and Policy Analysis
Central banks and international organizations need to evaluate the impact and interaction of policy instruments in order to design effective policy strategies. In their working paper Prof. Volker Wieland and his team of the Macroeconomic Model Database (MMB) present a new and systematic approach for comparative analysis of models.
Its computational implementation enables individual researchers to conduct systematic model comparison and policy evaluations easily. The authors review the literature on model comparison and also demonstrate how models become reproducible for other researchers.
The new version of the open archive MMB 2.1, which is accessible via internet under www.macromodelbase.com, contains 68 models and various policy rules. The MMB offers many options for comparing model structures and policy implications and for exploring a particular model in great detail. There is no need for bringing together teams of models builders. The platform serves as an archive of models developed at different times and based on different theories on how the economy functions. The tool clarifies the strengths and weaknesses of different models and enables users to check the results of studies or assess the impact of parameter shifts.
This paper is published in the Handbook of Macroeconomics, Vol.2, from John B. Taylor and Harald Uhlig, released in December 2016.