The ECB's New Multi-Country Model for the euro area: NMCM - Simulated with rational expectations

► We present an estimated medium-scale model for 5 euro area countries. ► With a tight theoretical structure with optimising households, trade unions and firms ► We allow medium-run deviations from balanced growth path via estimated CES supply-side. ► Expectations simulated under model-consistent rational expectations ► Reactions to shocks depend on whether they are (pre-) announced, and/or (un)credible.