This paper presents the model used for simulation purposes within the Spanish Ministry of Economic Affairs and Finance. REMS (a Rational Expectations Model for the Spanish economy) is a small open economy dynamic general equilibrium model in the vein of the New-Neoclassical-Keynesian synthesis...

Bayesian dynamic stochastic general equilibrium (DSGE) models combine microeconomic behavioural foundations with a full-system Bayesian likelihood estimation approach using key macro-economic variables. Because of the usefulness of this class ofmodels for addressing questions regarding the...

Over the period 19952006 the Spanish economy experienced a rapid increase in employment and output growth, a surge in investment over GDP, a substantial deterioration in the current account balance and an improvement in the finances of the social security system. This paper presents a dynamic...

Over the past 10 years dynamic stochastic general equilibrium (DSGE) models have become an important tool in quantitative macroeconomics. However, DSGE models were not considered as a forecasting tool until very recently. The objective of this paper is twofold. First, we compare the forecasting...

Bayesian approaches to the estimation of DSGE models are becoming increasingly popular. Prior knowledge is normally formalized either be information concerning deep parameters’ values (‘microprior’) or some macroeconomic indicator, e.g. moments of observable variables (‘macroprior’)....

This article offers a narrative of the Spanish crisis building upon previous literature and the papers published in this issue. This narrative focuses on two main topics: (1) the reasons why the Spanish economy embarked in the expansionary/speculative path resulting in an over-accumulation of...