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COSMO is a new structural econometric model of the Irish economy, with a theoretically founded structure and specification. It is designed to be used for medium-term economic projections and policy analysis. This paper outlines the key mechanisms in the model and explores the behaviour of the model by examining a range of shocks. One of the key contributions of COSMO is the incorporation of financial frictions in a small open economy model. The behavioural equations in COSMO are estimated econometrically, and the second contribution of the model relates to how all available information at both annual and quarterly frequency is exploited in estimation, applying a novel technique to convert dynamics estimated at one frequency into the other.