01870cas a2200253 a 4500 AALejournalIMF013284 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475519860 1018-5941 BD-DhAAL BD-DhAAL Bayoumi, Tamim. Macroeconomic Model Spillovers and Their Discontents / Tamim Bayoumi, Francis Vitek. Washington, D.C. : International Monetary Fund, 2013. 1 online resource (25 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students The Great Recession underlined that policies in some countries can have profound spillovers elsewhere. Sadly, the solution of simulating large macroeconomic models to measure these spillovers has been found wanting. Typical models generate lower international correlations of output and financial asset prices than are seen in even pre-crisis data. Imposing higher financial market correlations creates more reasonable cross-country spillovers, and is likely to become the norm in policy modeling despite weak theoretical underpinnings, as is already true of sticky wages. We propose using event studies to calibrate market reactions to particular policy announcements, and report results for U.S. monetary and fiscal policy announcements in 2009 and 2010 that are plausible and event-specific. Mode of access: Internet Vitek, Francis. IMF Working Papers; Working Paper ; No. 2013/004 Full text available on IMF http://elibrary.imf.org/view/journals/001/2013/004/001.2013.issue-004-en.xml IMF e-Library