CEPR Network on Macroeconomic Modelling and Model Comparison (MMCN)
Quantitative macroeconomic models play an important role in informing policy makers at central banks, finance ministries, legislative bodies, regulatory authorities and international organizations about the consequences of monetary, fiscal and macro-prudential policies. These policies in turn influence the decision making of households and firms, the functioning of economies as well as the macroeconomic outcomes, and the economic welfare inherent in these outcomes. While there is only a limited number of policy choices and macroeconomic outcomes observable across countries, there is a multitude of macroeconomic models, and their number is growing rapidly. This is as much due to economists’ creativity as to the enormous, partly novel, challenges faced by today’s policy makers, for which they need advice and guidance based on models adequately reflecting the data.
In order for quantitative modelling to be effective in improving policy making, models need to be testable, reproducible, replicable and comparable. Furthermore, given the degree of uncertainty inherent to modelling and the prediction of policy effects, it is essential to be able to inform policy makers about policy strategies that are robust to model uncertainty.
The Macroeconomic Modelling and Model Comparison Network (MMCN) aims to make progress in this regard by promoting more collaboration among interested researchers in academia and policy institutions. It provides a forum for presenting new models as well as methods for simulating and estimating them, thereby enhancing opportunities for building directly on work by others. The network is to nurture a spirit of pluralism involving critical conversation and tolerant communication between different approaches. Systematic comparisons of new and existing models are encouraged. The forum offers possibilities for organizing model fitting and forecasting competitions. Effort will also be devoted to studies that identify policies that would perform well across a range of relevant models. Examples include the effects of quantitative easing, macro-prudential policy tools, tax policy and structural reform.
CEPR’s MMCN is led by Volker Wieland from the Institute of Monetary and Financial Stability in Frankfurt. It is also supported by a new joint initiative of Stanford University’s Hoover Institution and the IMFS that is funded by the Alfred P. Sloan Foundation.
The MMCN will hold an annual symposium – the first is to be held on 19-20 June 2017 at the IMFS in Frankfurt (click here for the call to papers). It builds on a first research meeting that already took place in Frankfurt on April 5-6, 2016. Future meetings will also be held in other locations in Europe and in the United States. There is a group of CEPR-MMCN Network Fellows. Institutions are also invited to participate in the network.