Delfi: a model of the Dutch economy

The modelling of the economy in Delfi combines the neoclassical approach to economics - with optimizing rational economic agents and clearing markets - with new-Keynesian elements, in which imperfections and frictions affect the short-run dynamics of product markets, the labour market and financial markets.

In Delfi, we put emphasis on the description of the supply side of the economy, which is crucial for understanding long-term developments. In addition to an explicit and consistent modelling of the supply side, Delfi provides a rich description of financial transmission mechanisms, with an explicit role for pension funds, credit risk spreads and quantity rationing in loans to firms and mortgage credit. Delfi is used for scenario analyses and to produce DNB’s biannual projections.