Tamim Bayoumi, Hamid Faruqee, Douglas Laxton, Philippe Karam, Alessandro Rebucci, Jaewoo Lee, Benjamin Hunt, and Ivan Tchakarov
INTERNATIONAL MONETARY FUND
Over the past two years, the IMF staff has been developing a new multicountry macroeconomic model called the Global Economy Model (GEM). This paper explains why such a model is needed, how GEM differs from its predecessor model, and how the new features of the model can improve the IMF's policy analysis. The paper is aimed at a general audience and avoids technical detail. It outlines the motivation, structure, strengths, and limitations of the model; examines three simulation exercises that have been completed; and discusses the future path of GEM.