QUEST II. A Multi-Country Business Cycle and Growth Model

Table 7: Effects of US monetary expansion: (permanent increase in money target of 1%)

year: US:______________________	1	2	3	4	5	6	7	8	9	10
GDP	0.55	0.33	0.21	0.15	0.11	0.09	0.08	0.07	0.07	0.06
potential. private. GDP	0.22	0.19	0.14	0.11	0.09	0.08	0.07	0.07	0.07	0.06
private .consumption	0.47	0.27	0.17	0.13	0.11	0.10	0.09	0.08	0.07	0.07
private.investment	1.62	0.75	0.41	0.21	0.10	0.05	0.02	0.01	0.00	0.00
total.public.expenditure	0.29	0.27	0.17	0.12	0.09	0.08	0.07	0.06	0.06	0.05
exports	0.11	0.17	0.17	0.16	0.15	0.14	0.14	0.13	0.12	0.12
imports	0.62	0.28	0.15	0.09	0.05	0.04	0.03	0.02	0.02	0.02
employment	0.28	0.21	0.12	0.08	0.05	0.04	0.03	0.03	0.03	0.03
real.wage.costs	0.04	0.21	0.13	0.09	0.07	0.06	0.05	0.04	0.04	0.04
price.level	0.45	0.67	0.79	0.85	0.89	0.91	0.92	0.93	0.93	0.93
cons.price.level	0.48	0.69	0.80	0.86	0.89	0.91	0.92	0.93	0.94	0.94
dollar.exchange.rate	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
DM.exchange.rate	0.81	0.94	1.02	1.06	1.07	1.08	1.09	1.09	1.09	1.09
real.exchange.rate	-0.45	-0.67	-0.78	-0.84	-0.88	-0.90	-0.91	-0.92	-0.92	-0.93
real.eff.exch.rate	0.13	0.09	0.07	0.07	0.06	0.06	0.05	0.05	0.05	0.05
money	1.01	1.00	1.00	1.00	1.00	1.00	1.00	1.00	1.00	1.00
short.rate *	0.11	0.11	0.05	0.02	0.01	0.01	0.00	0.00	0.00	0.00
long.rate *	0.01	0.01	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
real.short.rate *	-0.16	-0.04	-0.03	-0.02	-0.01	-0.01	-0.01	-0.01	0.00	0.00
inflation *	0.45	0.22	0.12	0.06	0.03	0.02	0.01	0.01	0.01	0.00
unemployment.rate *	-0.26	-0.20	-0.12	-0.07	-0.05	-0.04	-0.03	-0.03	-0.03	-0.02
debt. (% of GDP) *	-0.20	0.00	0.02	0.01	0.01	0.01	0.01	0.01	0.00	0.00
deficit (% of GDP) *	0.49	0.06	0.00	-0.01	0.00	0.00	0.00	0.00	0.00	0.00
trade.balance (% of GDP) *	-0.10	-0.03	-0.01	0.00	0.01	0.01	0.01	0.01	0.01	0.01

Note: percentage differences from base (except those marked *: absolute differences from base)

Table 7.a: International transmission of US monetary expansion: ( first year GDP effect)

	DE	FR	IT	UK	ES	NL	BE	DK	IR	PO	GR	OS	SW	SF	US	JA
GDP	0.04	0.02	0.01	0.02	0.01	-0.05	-0.07	0.01	-0.04	0.01	0.01	0.00	0.04	0.02	0.55	0.04

Note: GDP effect in first year, percentage difference from base; monetary assumption: interest rate targeting in EU and Japan.

Table 8: Effects of EU wide monetary expansion: ( permanent increase in money target of
1%)

year: EU15:___________________	1	2	3	4	5	6	7	8	9	10
GDP	0.61	0.36	0.21	0.12	0.08	0.05	0.04	0.03	0.02	0.01
potential. private. GDP	0.14	0.09	0.05	0.04	0.03	0.02	0.02	0.01	0.01	0.01
private .consumption	0.51	0.22	0.13	0.09	0.07	0.06	0.05	0.04	0.04	0.03
private.investment	1.36	0.79	0.40	0.15	0.02	-0.03	-0.06	-0.07	-0.07	-0.06
total.public.expenditure	0.45	0.42	0.25	0.16	0.12	0.09	0.07	0.06	0.05	0.05
employment	0.16	0.07	0.01	0.00	-0.01	-0.01	-0.01	-0.01	-0.01	-0.01
real.wage.costs	0.28	0.43	0.24	0.15	0.09	0.07	0.05	0.04	0.03	0.03
price.level	0.39	0.63	0.78	0.87	0.91	0.94	0.95	0.96	0.97	0.97
consumer.price.level	0.41	0.68	0.83	0.92	0.97	1.00	1.01	1.02	1.02	1.03
dollar.exchange.rate	0.57	0.78	0.90	0.97	1.00	1.01	1.01	1.01	1.01	1.01
real.exchange.rate	0.18	0.15	0.12	0.10	0.08	0.07	0.06	0.05	0.04	0.04
real.eff.exch.rate	0.05	0.06	0.05	0.05	0.04	0.04	0.03	0.03	0.03	0.02
money	1.01	0.99	1.00	1.00	1.00	1.00	1.00	1.00	1.00	1.00
short.rate *	0.26	0.16	0.08	0.04	0.02	0.01	0.00	0.00	0.00	0.00
long.rate *	0.02	0.01	0.00	0.00	0.00	0.00	0.00	0.00	0.00	0.00
real.short.rate *	-0.01	-0.02	-0.02	-0.01	-0.01	-0.01	-0.01	-0.01	-0.01	-0.01
inflation *	0.39	0.25	0.15	0.08	0.05	0.03	0.01	0.01	0.01	0.00
unemployment.rate *	-0.14	-0.06	-0.01	0.00	0.01	0.01	0.01	0.01	0.01	0.01
debt.(% of GDP) *	-0.14	0.03	0.02	0.01	0.01	0.00	0.00	0.00	0.00	0.00
deficit. (% of GDP) *	0.63	0.02	-0.02	-0.01	-0.01	0.00	0.00	0.00	0.00	0.00
trade.balance. (% of GDP) *	-0.01	0.02	0.02	0.02	0.02	0.02	0.02	0.02	0.01	0.01

Note: percentage differences from base (except those marked *: absolute differences from base)

25

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