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Home > Research and Studies > Bank of Japan Working Paper Series, Review Series, and Research Laboratory Series > Bank of Japan Working Paper Series 2004 > The Japanese Economic Model: JEM
Ippei Fujiwara *2
Naoko Hara *3
Yasuo Hirose *4
Yuki Teranishi *5
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In this paper, we set out the JEM (Japanese Economic Model), a large macroeconomic model of the Japanese Economy. Although the JEM is a theoretical model designed with a view to overcoming the Lucas (1976) critique of traditional large macroeconomic models, it can also be used for both projection and simulation analysis. This is achieved by embedding a mechanism within which "short-run dynamics," basically captured by a vector autoregression model, eventually converge to a "short-run equilibrium," which is defined using a dynamic general equilibrium-type model.
C30; E10; E17; E50
Large Macroeconomic Model; Monetary Policy;
Numerical Method; Projection;