Why a financial module
A conventional CGE treats the interest rate as exogenous and the nominal exchange rate as the numeraire. Tightening then cuts investment, lowers domestic prices relative to foreign prices, and raises net exports via real depreciation. With financial markets, a higher interest rate attracts capital, appreciates the currency, and can worsen the trade balance. A financial module captures this channel.
Linkages
Three links join the financial block to the real model: the current-account deficit equals net capital inflow; the government deficit equals new domestic bond issuance; industry investment equals the rise in that industry’s financial liabilities. The nominal exchange rate, bond yields, and financing costs then become endogenous.