A Baseline Closed Economy Model for Monetary Policy Analysis



Year of publication 2009
Type Article in Periodical
Magazine / Source Bulletin of the Czech Econometric Society
MU Faculty or unit

Faculty of Economics and Administration

Field Economy
Keywords DSGE; New Keynesian model; Bayesian estimation; impulse responses
Description The paper provides an analysis of the baseline New Keynesian DSGE model for a closed economy. The model is estimated with a Bayesian technique using quarterly Eurozone data. The estimation results are discussed and compared with related papers. Via impulse responses to unanticipated shocks, we analyze the behaviour of the model. We carry out this analysis in three steps. First, we analyze the model behaviour without any rigidities in order to understand essential model mechanisms. Then, we add separately real and nominal rigidities to investigate their impacts within the model.
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