Models and the Modeling of Monetary Policy Now, that is a lot of talk about the process of monetary policymaking. Let me turn to some of the machinery behind that process--in particular, to macroeconomic models and their role in assisting the FOMC’s decisionmaking.
While it is true that a government is required to allow capital flows when the country has a commitment liberalizing the supply of a service requiring such capital movement, the capital account liberalization involved is limited in extent.