Role of Financial Market in Macro Modeling

Before the credit crunch of August 2007, some researches were warning that interaction between macroeconomic and financial variables should be taken as a central issue in economics. Even though, the lack of financial variables in macro models, especially in policy decision making level, became one of the most obvious shortcomings of macroeconomic theory during the recent financial crisis, and led to fundamental critique. This book, therefore, provides investigation of role of financial variables in economic modeling in case Mongolia and checks whether there is difference from previous studies if they exit. For usage of this study is not only for determining role of financial market, but also defining contribution of financial variables in macro forecasting.