Monetary politics and macroeconomic stabilization: idenfication and application of general equilibrium models

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Project Identification
GA402/05/2172
Project Period
1/2005 - 1/2007
Investor / Pogramme / Project type
Czech Science Foundation
MU Faculty or unit
Faculty of Economics and Administration
Keywords
Monetary business cycle, Dynamic general equilibrum model, optimal and robustness monetary policy rule
Cooperating Organization
Charles University
Czech Technical University Prague

The main of goal of the project is investigation of the impacts of the different types of economic agents behavior on the optimal monetary policy choice. The research will proceed in five basic lines. The first line will concentrate on a micro based model which will serve as a basis for larger monetary business cycle MBC models with rational and nearly rational expectations, nominal and real rigidities and monetary rules. The MBC models will represent open economy, where the position of foreign policy in business cycle plays a significant role. The second research line will be devoted to the advanced methods of MBC model control by high order approximations around stochastic steady-states. The third line covers the advanced methods of independent non-linear MBC models by the means of the extended second order Kalman filter and extended boot-strap filter-smoother. Theoretical models to be quantified, on a basis of the transmission function, will be analyzed from their dynamic stability aspects. GMM will be another method employed for the MBC model estimation. The fourth line of the research will propose and test optimal rules for monetary policy in the small open economy. The optimality will be considered not only from the viewpoint of the monetary policy loss function, but its robustness as well. The development of the stochastic dynamic general equilibrium model with endgenous demand for monetary aggregates will form the fifth line of the research.

Publications

Total number of publications: 49


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