The EAGLE. A model for policy analysis of macroeconomic interdependence in the euro area

► We develop EAGLE a 4-region macroeconomic model of the euro area and the world. ► The model is microfounded and designed for quantitative policy analysis. ► We simulate a permanent reduction in labor tax rates in the euro area. ► The effects on real activity are expansionary in both the short run and long run. ► Coordinated reforms imply extra gains and a more even performance across regions.