A macroeconomic (or macroeconometric) model is a quantitative representation of an economy, or of several interdependent countries. It assembles a number of equations and allows study of the behaviour of the economy(ies) when all the various relationships between variables are operative simultaneously. In addition, a model synthesises data and knowledge with a view to explain economic history better and to forecast future developments.
KeywordsInterest Rate Monetary Policy Central Bank Exogenous Variable Rational Expectation
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