Specification of the volume and price equation of Finlands multilateral exports of goods is based on the assumption that Finnish products enjoy only temporary monopoly power. In the context of the whole model this implies that the price of exports of goods as well as short-run marginal costs...

In this paper balance-of-payments crises are studied in a framework in which investors do not know the threshol~ level of foreign reserves, the attainment of which implies that the central bank abandons its fixed exchange target. Investors are alternatively risk neutral or risk averters. It is...

This paper contains a description of the production and labour demand sections of the BOF4 model. CES value added production functions are developed and estimated for the five sectors of the economy. From these the marginal product of labour and capital functions are derived which are important...

In this paper the BOF4 model of the Bank of Finland, which is estimated in a fi xed exchange rate - regime, i s transformed into a model with a floating exchange, rate. In endogenizing the exchange rate two al ternative assumpti ons about the formati on of exchange rate expectations are used,...

This paper describes the supply of labour and the determination of wages and prices in the BOF4 model. Labour supply is modelled as a function of real wage, income and discouraged worker effects. Wages are a functi on of the unemployment rate. Besides that they respond to the deviation of actual...

This report describes the determination of private consumption and investment in the BOF4 model. The consumption function of the model is largely based on thepermanent income hypothesis. Relative prices and the level of aggregate consumption determine the shares of the three consumption...

This paper describes the modelling of financial markets and the balance of payments in BOF4, a quarterly macroeconomic model developed by the Bank of Finland. The short-term interest rate is determined as a result of the interaction of the demand for money and money supply, as in the...

This paper describes the structure and simulation properties of the Bank of Finland's macroeconometric model BOF4. BOF4 is a quarterly, medium-sized macro model of the Finnish economy, consisting of about 70 behavioural equations. Including accounting identities and technical linkages of...

This paper describes how income distribution and government finances are modelled i n BOF4, a quarterly econometric model of the Bank of Finland. The equations eomprising the ineome distribution and government finanees bloek in the model eonsist of tax equations, behavioural equations for the...

This report is the basic documentation of the present (fifth) version of the Bank of Finland macroeconomic model, BOF5, built for policy simulation and forecasting.In constructing the model, consistent treatment of expectations is emphasized.Following current theoretical literature,...