Morkmon : A Quarterly Model of the Netherlands Economy for Macro-Economic Policy Analysis

1 Introductory remarks.- 1.1 Prolegomena.- 1.2 Organization.- 2 The relationships in the monetary sector.- 2.1 Balance sheets.- 2.1.1 Private sector.- 2.1.2 Money-creating institutions.- 2.1.3 Central bank.- 2.1.4 Government.- 2.1.5 Rest of the world.- 2.2 Balance sheet constraints.- 2.3 The monetary model in outline.- 2.4 The behavioural equations for the monetary sector.- 2.4.1 Demand for financial assets.- 2.4.1.1 Portfolio behaviour model.- 2.4.1.2 Empirical elaboration for financial assets.- 2.4.1.3 Empirical elaboration for the money stock.- 2.4.2 Lending.- 2.4.3 External capital transactions.- 2.4.4 Long and short-term interest rates.- 2.4.5 Foreign exchange market.- 2.5 Residual items.- Annex.- 3 The relationships in the real economic sector.- 3.1 Income and expenditure.- 3.2 The real economic model in outline.- 3.3 The behavioural equations of the real economic sector.- 3.3.1 Domestic expenditure.- 3.3.2 Goods trade with the rest of the world.- 3.3.3 Labour market and wage determination.- 3.3.3.1 Demand for labour.- 3.3.3.2 Supply of labour.- 3.3.3.3 Wage determination.- 3.3.4 Output.- 3.3.5 Price determination.- 3.3.6 Income distribution and the public sector.- 3.4 Comparison of elasticities for external trade.- 4 The links between the monetary and the real economic sector.- 5 The integrated model and its descriptive power.- 5.1 The ex post operation of the model.- 5.2 The operation of the model viewed graphically.- 6 The model as a tool for policy analysis.- 6.1 Introduction.- 6.2 Uncertainty variants.- 6.2.1 Additional growth of world trade.- 6.2.2 Depreciation of the dollar.- 6.2.3 Increase in foreign interest rates.- 6.3 Some policy variants.- 6.3.1 Increase in the domestic discount rate.- 6.3.2 Limitation of net money-creating operations.- 6.3.3 Shift in social insurance contributions from employers to employees.- 6.4 Sensitivity variants.- 6.5 Short and medium term.- 7 Concluding remarks.- 7.1 Criticisms of models for policy planning.- 7.2 Model building and theoretical innovation.- 7.3 Epilogue.- Appendix I The equations used in the model MORKMON.- Appendix II Explanation of symbols used.- Name Index.