Publication

This paper discusses the importance of asset markets and financial flows in general equilibrium models. It is argued that if asset markets are not integrated into economic models, the dynamic story of adjustment will be incomplete and the usefulness of modeling results for a variety of applications will be limited. This paper also provides a general outline of the MSG and G-Cubed approaches, focusing on the role of asset markets and financial flows and summarizes a range of studies where the models have provided interesting and important insights.