One in five main models has endogenous financial sector
Benchmark highlights array of methods central banks use to model financial sector
One in five central banks that responded to the Economics Benchmarks 2024 have an endogenous financial sector in their main forecasting model.
The result suggests a significant minority of central banks has developed more advanced ways of exploring how the financial and real sides of the economy interact.
However, 41.2% of central banks have no financial sector in their main model, while 14.7% only include relatively limited financial frictions and 8.8% use satellite models as an exogenous
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