Like QUEST, GM belongs to the class of New-Keynesian Dynamic Stochastic General Equilibrium (DSGE) models. These models are core workhorses in international institutions and central banks as well as academic research.
The GM model offers flexible multi-country configurations. A GM2 version features the euro area (EA) and the rest-of-the-world (RoW); GM3-EMU versions focus on one of the four largest euro area economies together with rest-of-the-EA and the RoW; the GM3 model covers the EA, the US, and the RoW.
Bayesian estimation techniques combine a micro-founded model structure useful for policy analysis with a good probabilistic description of the observed data and forecasting performance. Recent extensions focus on macroeconomic nonlinearities, energy price dynamics, and the economic impact of the pandemic.
- Since 2015, the GM model is regularly applied at all stages of DG ECFIN's forecast. For example, it assesses revisions of external assumptions (such as oil prices) or provides alternative projections such as upside and downside scenarios during the pandemic. It also provides projections for macroeconomic aggregates and fiscal variables.
- The GM model is used for shock decompositions, for example, to assess the main drivers of growth, inflation, and imbalances in historical data and current economic forecasts.
- GM-based results have been published in peer-reviewed academic journals, fostering links to academia and the research community.
- Cardani, Roberta, Stefan Hohberger, Philipp Pfeiffer and Lukas Vogel (2022). "Domestic versus foreign drivers of trade (im)balances: How robust is evidence from estimated DSGE models?," Journal of International Money and Finance, vol. 121(C).
- Cardani Roberta, Olga Croitorov, Massimo Giovannini, Philipp Pfeiffer, Marco Ratto and Lukas Vogel (2021): “The Euro Area’s Pandemic Recession: A DSGE-Based Interpretation”, European Economy Discussion Paper 153, DG ECFIN
- Guido Cozzi, Beatrice Pataracchia, Philipp Pfeiffer and Marco Ratto (2021), “How much Keynes and how much Schumpeter?”, European Economic Review (133).
- Matthias Burgert, Philipp Pfeiffer and Werner Roeger (2021). “Fiscal policy in a monetary union with downward nominal wage rigidity”, Swiss National Bank Working Papers, 2021-16.
- Olga Croitorov, Massimo Giovannini, Stefan Hohberger, Marco Ratto and Lukas Vogel (2020). “Financial spillover and global risk in a multi-region model of the world economy”, Journal of Economic Behavior and Organization, (177), p. 185-218
- Stefan Hohberger, Romanos Priftis and Lukas Vogel (2020) "The distributional effects of conventional monetary policy and quantitative easing: Evidence from an estimated DSGE model," Journal of Banking & Finance, vol. 113(C).
- Stefan Hohberger, Marco Ratto and Lukas Vogel (2020) "The euro exchange rate and Germany's trade surplusInternational Finance, vol. 23(1), pages 85-103.
- Massimo Giovannini, Stefan Hohberger, Robert Kollmann, Marco Ratto, Werner Roeger and Lukas Vogel (2019) "Euro Area and US external adjustment: The role of commodity prices and Emerging Market shocks,"Journal of International Money and Finance, vol. 94(C), pages 183-205.
- Stefan Hohberger, Romanos Priftis and Lukas Vogel (2019) "The macroeconomic effects of quantitative easing in the euro area: Evidence from an estimated DSGE model," Journal of Economic Dynamics and Control, 108(C).
- Robert Kollmann, Beatrice Pataracchia, Rafal Raciborski, Marco Ratto, Werner Roeger and Lukas Vogel (2016) "The post-crisis slump in the Euro Area and the US: Evidence from an estimated three-region DSGE model,“ European Economic Review (88), p.21-41.