The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region, forward-looking, DSGE model developed at the International Monetary Fund for policy analysis and international economic research. This paper documents the incorporation of demographic features into the model. The analysis presented illustrates how these new features enable the model to estimate some of the macroeconomic consequences of changing demographics.

In this paper, we investigate the mechanisms through which import tariffs impact the macroeconomy in two large scale workhorse models used for quantitative policy analysis: a computational general equilibrium (CGE) model (Purdue University GTAP model) and a multi-country dynamic stochastic general equilibrium (DSGE) model (IMF GIMF model). The quantitative effects of an increase in tariffs reflect different mechanisms at work. Like other models in the trade literature, in GTAP higher tariffs generate a loss in terms of output arising from an inefficient reallocation of resources between sectors. In GIMF instead, as in other DSGE models, tariffs act as a disincentive to factor utilization. We show that the two models/channels can be broadly interpreted as capturing the impact of tariffs on different components of a country’s aggregate production function: aggregate productivity (GTAP) and factor supply/utilization (GIMF). We discuss ways to combine the estimates from these two models to provide a more complete assessment of the macro effects of tariffs.

This paper uses a multi-region, forward-looking, DSGE model to estimate the macroeconomic impact of a tax reform that replaces a corporate income tax (CIT) with a destination-based cash-flow tax (DBCFT). Two key channels are at play. The first channel is the shift from an income tax to a cash-flow tax. This channel induces the corporate sector to invest more, boosting long-run potential output, GDP and consumption, but crowding out consumption in the short run as households save to build up the capital stock. The second channel is the shift from a taxable base that comprises domestic and foreign revenues, to one where only domestic revenues enter. This leads to an appreciation of the currency to offset the competitiveness boost afforded by the tax and maintain domestic investment-saving equilibrium. The paper demonstrates that spillover effects from the tax reform are positive in the long run as other countries’ exports benefit from additional investment in the country undertaking the reform and other countries’ domestic demand benefits from improved terms of trade. The paper also shows that there are substantial benefits when all countries undertake the reform. Finally, the paper demonstrates that in the presence of financial frictions, corporate debt declines under the tax reform as firms are no longer able to deduct interest expenses from their profits. In this case, the tax shifting results in an increase in the corporate risk premia, a near-term decline in output, and a smaller long-run increase in GDP.

This paper uses a multi-region, forward-looking, DSGE model to estimate the macroeconomic impact of a tax reform that replaces a corporate income tax (CIT) with a destination-based cash-flow tax (DBCFT).Two key channels are at play.The first channel is the shift from an income tax to a cash-flow tax.This channel induces the corporate sector to invest more, boosting long-run potential output, GDP and consumption, but crowding out consumption in the short run as households save to build up the capital stock.The second channel is the shift from a taxable base that comprises domestic and foreign revenues, to one where only domestic revenues enter.This leads to an appreciation of the currency to offset the competitiveness boost afforded by the tax and maintain domestic investment-saving equilibrium.The paper demonstrates that spillover effects from the tax reform are positive in the long run as other countries' exports benefit from additional investment in the country undertaking the reform and other countries' domestic demand benefits from improved terms of trade.The paper also shows that there are substantial benefits when all countries undertake the reform.Finally, the paper demonstrates that in the presence of financial frictions, corporate debt declines under the tax reform as firms are no longer able to deduct interest expenses from their profits.In this case, the tax shifting results in an increase in the corporate risk premia, a near-term decline in output, and a smaller long-run increase in GDP.

The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region, forward-looking, DSGE model developed by the Economic Modeling Division of the IMF for policy analysis and international economic research.This paper uses GIMF to illustrate when a destination-based cash-flow tax is equivalent to a combination of a consumption tax and a labor subsidy, as the latter combination have been advocated as proxies for the implementation of destination-based cash-flow taxes.The paper documents the conditions under which both types of taxes are identical and how the equivalence in terms of the real economy and tax revenue responses can be broken, namely after the introduction of finitely lived consumers that value government debt as net wealth (real economy) and the introduction of untaxed government expenditure (tax revenue).

The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region, forward-looking, DSGE model developed at the International Monetary Fund for policy analysis and international economic research. This paper documents the incorporation of corporate income, cash-flow and destination based cash-flow taxes into the model. The analysis presented considers the transmission mechanism of these taxes and details how financial frictions interact with each of the taxes.

The Flexible System of Global Models (FSGM) is a group of models developed by the Economic Modeling Division of the IMF for policy analysis. A typical module of FSGM is a multi-region, forward-looking semi-structural global model consisting of 24 regions. Using the three core modules focused on the G-20, the euro area, and emerging market economies, this paper outlines the theory under-pinning the model, and illustrates its macroeconomic properties by presenting its responses under a wide range of experiments, including monetary, financial, demand, supply, fiscal and international shocks.

The recent boom in unconventional energy production is transforming the energy landscape in North America, with important implications for global energy markets and the broader competitiveness outlook. This book, within a unifying policy perspective, examines the impact the upsurge in energy production has had on the manufacturing sectors of the United States, Canada, and Mexico, and of the region as a whole, which produces nearly a quarter of the world’s energy.

This paper uses two of the IMF's structural macroeconomic models to estimate the potential global impact of the boom in unconventional oil and natural gas in the United States.The results suggest that the impact on the level of U.S. real GDP over roughly the next decade could be significant, but modest, ranging between 1 and 1½ percent.Further, while the impact on the U.S. energy trade balance will be large, most results suggest that its impact on the overall U.S. current account will be negligible.The impact outside of the United States will be modestly positive on average, but most countries dependent on energy exports will be affected adversely.

The IMF’s Global Integrated Monetary and Fiscal model (GIMF) is used to examine the scope for structural reforms in the euro area to offset the negative impact of fiscal consolidation required to put public debt back on a sustainable path. The results suggest that structural reforms in core countries could quite reasonably be expected to offset the near term negative impact on activity arising from the required fiscal consolidation that uses a plausible mix of instruments to achieve the permanent improvement in the deficit. However, for the periphery, where the required consolidation is roughly twice as large as that required in the core, the results suggest that it would take several years before structural reforms could return the level of output back to its pre-consolidation path.

Japan has the most rapidly aging population in the world. This affects growth and fiscal sustainability, but the potential impact on inflation has been studied less. We use the IMF’s Global Integrated Fiscal and Monetary Model (GIMF) and find substantial deflationary pressures from aging, mainly from declining growth and falling land prices. Dissaving by the elderly makes matters worse as it leads to real exchange rate appreciation from the repatriation of foreign assets. The deflationary effects from aging are magnified by the large fiscal consolidation need. Many of these factors will beset other advanced countries as well, but we find that deflation risk from aging is not inevitable as ambitious structural reforms and an aggressive monetary policy reaction can provide the offset.

The Global Integrated Monetary and Fiscal model (GIMF) is a multi-region, forward-looking, DSGE model developed by the Economic Modeling Division of the IMF for policy analysis and international economic research. Using a 5-region version of the GIMF, this paper illustrates the model’s macroeconomic properties by presenting its responses under a wide range of experiments, including fiscal, monetary, financial, demand, supply, and international shocks.

A young woman who presented with chest pain was shown with CT and selective coronary angiography to have spontaneous dissections of her left anterior descending and distal right coronary arteries. She was managed with enoxaparin, aspirin, clopidogrel and metoprolol: she was well with a normal stress echocardiogram fourteen months later.Surgical intervention or angioplasty and stent deployment may be avoided in such patients if they are clinically stable. (Heart, Lung and Circulation 2010;19:678-680) (C) 2010 Australasian Society of Cardiac and Thoracic Surgeons and the Cardiac Society of Australia and New Zealand. Published by Elsevier Inc. All rights reserved.

In this paper, the IMF's new Global Economy Model (GEM) is used to estimate the contribution of unbalanced growth to the decline in the share of goods production in Australia and New Zealand. The simulation results suggest that faster productivity growth in the tradable goods sector in Australia, New Zealand, and their major trading partners accounts for a significant portion of the relative decline in the importance of goods production. Over the 1995 to 2004 period, unbalanced growth explains more than 80 percent of the decline in goods production in both countries.

In this paper, the IMF’s new Global Economy Model (GEM) is used to estimate the relative importance of a number of factors argued to explain the differences in the trends in core inflation and relative prices in the United Kingdom, the Euro area and the United States. The simulation results indicate that although the direct effect of globalization has had a larger effect in the United Kingdom than in either the United States or the Euro area, it explains only a portion of how the developments and U.K. specific factors played an important role.

Using a variant of the IMFs Global Economy Model (GEM), featuring energy as both an intermediate input into production and a final consumption good, this paper examines the macroeconomic implications of large increases in the price of energy. Within a fully optimizing framework with nominal and real rigidities arising from costly adjustment, large increases in energy prices can generate inflation persistence similar to that seen in the 1970s if the monetary authority misperceives the economy's supply capacity and workers are able to temporarily resist some of the erosion in their real consumption wages resulting from the energy price increase. In the absence of these two responses, the model suggests that energy price shocks cannot generate the type of stagflation witnessed in the 1970s. The analysis goes some way toward reconciling the results found in the empirical literature on the changing nature of the macroeconomic implications of oil price shocks.

Using a variant of the IMF's Global Economy Model (GEM), featuring energy as both an intermediate input into production and a final consumption good, this paper examines the macroeconomic implications of large increases in the price of energy. Within a fully optimizing framework with nominal and real rigidities arising from costly adjustment, large increases in energy prices can generate an inflation response similar to that seen in the 1970s if the monetary authority misperceives the economy's supply capacity and workers resist the erosion in their real consumption wages resulting from the price increase. In the absence of either of these two responses, the model suggests that energy price shocks cannot generate the type of stagflation witnessed in the 1970s. Further, even allowing for these two effects, the results do not suggest that the increase in the price of oil in late 1973 and early 1974 can fully explain the extent of the slowing in real activity or the magnitude of the acceleration in inflation experienced in the United States in 1974 and 1975.