Since 2014, the JRC and DG ECFIN develop the GM model (the EC Global Multi-country macro-economic model), to complement the QUEST III model for macroeconomic surveillance, monitoring, forecasting and research.
The GM model 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 different multi-country configurations: the GM2 version features the euro are (EA) and the rest-of-the-world (RoW); GM3-EMU versions focus on an individual Euro Area country together with the rest-of-the-EA (REA) and RoW; the GM3 version covers the EA, US and the RoW.
The GM model is estimated using Bayesian techniques, which allows combining 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 Economic 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.
Published research
The COVID-19 Recession on Both Sides of the Atlantic: A Model-Based Comparison
European Economy Discussion Papers (2023)
The Euro Area’s Pandemic Recession: A DSGE-Based Interpretation
European Economy Discussion Papers (2021)
How much Keynes and how much Schumpeter?
Scientific article (2021)
Financial spillover and global risk in a multi-region model of the world economy
Scientific article (2020)
The euro exchange rate and Germany's trade surplus
Scientific article (2020)
Comparing post-crisis dynamics across Euro Area countries with the Global Multi-country model
Scientific article (2019)
Euro Area and U.S. External Adjustment: The Role of Commodity Prices and Emerging Market Shocks
Scientific article (2019)
The Global Multi-Country Model (GM): an Estimated DSGE Model for the Euro Area Countries
Science for Policy report (2017)
Drivers of the post-crisis slump in the Eurozone and the US
Scientific article (2017)
Post-Crisis slump in the Euro-Area and the US: Evidence from an estimated three-region DSGE model
Scientific article (2016)
Selected contributions to European Economic Forecast
- Contribution to Spring 2023 Economic Forecasts – Thematic Box I.2.4. Which Factors Shape Growth and Inflation Going Forward? Model-Based Insights into the Spring Forecast
- Contribution to Spring 2023 Economic Forecasts – Special Issue 4.1 Medium-Term Projections of Potential GDP growth in turbulent times
- Contribution to Autumn 2022 Economic Forecasts – Special issue 4.1 Commodity-driven inflation: macro effects and risks
- Contribution to Spring Economic Forecast 2022 –Special issue 4 Alternative Scenarios on the Economic Outlook
- Contribution to European Economic Forecast 2021 – Special Topic 4.2 Energy Prices
- Contribution to European Economic Forecast Spring 2021- Special Issue 4.1. The Role of Saving in Determining the Recovery Path
- Contribution to European Economic Forecast Autumn 2021 – Special Issue 3.1. The road out of the crisis remans bumpy and uncertain
- Contribution to European Economic Forecasts Spring 2020, Ch.3 Special issue 1 How the pandemic shaped the Forecast
