Prospects for macroeconomic modelling discussed by central bank representatives in Moscow

On 20 November, the Bank of Russia hosted an international workshop on economic research entitled ‘Macroeconomic Models for Central Banks: Challenges and Perspectives’ in Moscow. The workshop was attended by representatives from the central banks and academic communities of Armenia, Great Britain, Hungary, Italy, Norway, Russia and Finland.

Similar to other central banks, the Bank of Russia has elaborated and is actively implementing a wide range of economic models for macroeconomic analysis and forecasting. These models are the cornerstone of monetary policy and financial stability decision-making. Moreover, central banks are paying a great deal of attention to the issues concerning the further improvement and development of economic models.

Structural developments evolving in the global economy require that central banks constantly adapt their modelling to economic developments. Advances in computer technologies, for their part, help develop economic research and modelling tools and foster the use of best practices in the activities of central banks. The workshop focussed on the two components of central banks’ research efforts – the challenges and perspectives .

The workshop attendees discussed the use of three types of model: dynamic general-equilibrium models (DSGE models), large-scale econometric models and agent-based semi-structural models. The discussion was devoted to the various ways to use these models both to formulate monetary policy and refine macroprudential regulation measures. Specific case studies included the selection of an optimal monetary policy by an oil-producing country (the Norway case) and the adjustment of macroprudential regulation ratios (the cases of Great Britain and Hungary).