A Macroeconomic model and stability analysis by parameters

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DAVID Stanislav VAŠÍČEK Osvald

Year of publication 2004
Type Article in Periodical
Magazine / Source International Advances in Economic Research
MU Faculty or unit

Faculty of Economics and Administration

Field Economy
Keywords Macroeconomic model; stability; zeros and poles; rational expectations
Description The article focuses on the New Keynesian multiple-equations small-open-economy macroeconomic model to illustrate deeper relations among model parameters. These relations are more important than the basic values of the parameters because it shows how the system behaves when some changes in the economy occur. The first stage of the analysis introduces a theoretical model. The second stage of the analysis estimates the states and parameters of the model on the quarterly data of the Czech economy. The third stage of the analysis focuses on the transfer function of this model and makes deeper behavior analysis. In the final stage, the article demonstrates the stability of the model, shown through the impulse functions of the model. This shows response of the macroeconomic model to unanticipated shocks.
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