SELMA is an open economy medium size New Keynesian model with sticky prices and wages.

It has an enriched fiscal policy block where the public sector has several tools at its disposal to stabilize the economy and the public finances. There are two countries, one small open economy (Sweden) and one large economy (Foreign) that engage in trade with each other via goods and bonds. Each economy consists of different agents such as households and firms. The households and firms in each country make decisions based on optimizing behavior and rational, forward-looking expectations. In addition to fiscal policy, there is also a central bank that conducts monetary policy.

SELMA provides a fully-fledged environment to conduct policy analysis and evaluate alternative economic scenarios.

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