STRESS Model

STRESS stands for Structural Reforms and Shadow Sector; it is medium-scale dynamic general equilibrium model which can be solved by Matlab and Dynare. Especially since the recent economic crisis, there has been a widespread debate on the macroeconomic impact of structural reforms. STRESS is an appropriate tool to examine the aggregate short- and long-run effects of both labor and product market deregulation policies, in the presence of an informal economy, and with a special focus on joint reforms and reform sequencing.

Version #1 is available for India (here), and version #2 for South Africa (here). In addition, STRESS has been used in several Article IV consultations by Fund staff:

  • two selected issues papers on India in 2014 and 2017 (here and here);
  • a box in Peru's 2017 AIV report (here);
  • a selected issues paper on Argentina in 2017 (here);
  • and a selected issues paper on Colombia in 2018 (here).

Further, there is work in progress on Peru and Morocco.

Additionally, training was also provided on the STRESS model i International Monetary Fund.

A two-pager is available here (last updated on September 17, 2018).