This paper describes the OECD’s new small global forecasting model for the three main OECD economic regions: the United States, the euro area, and Japan. The key variables – which include output, inflation, the trade balance, and import prices – are driven by monetary and fiscal policy,...

This paper highlights the factors that limit or increase cyclical divergence in the euro area and reviews one policy area that is important in fostering a speedy adjustment to shocks: the transmission of monetary policy via the housing market. A high interest rate sensitivity of housing markets...