DSGE Monetary Business Cycle Model

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Authors

POLANSKÝ Jiří VAŠÍČEK Osvald

Year of publication 2007
Type Article in Proceedings
Conference Proceedings of the 25th International Conference Mathematical Methods in Economics 2007
MU Faculty or unit

Faculty of Economics and Administration

Citation
Field Economy
Keywords DSGE model; cash-in-advance approach; Bayesian estimation; Metropolis Hastings algorithm
Description The paper deals with the cash-in-advance (CIA) dynamic stochastic general equilibrium macroeconomic model. The CIA models incorporate money into the neoclassical DSGE framework in order to analyze monetary issues and the business cycles. The CIA approach stresses the medium-of-exchange function of money. Money is directly used to purchase consumption goods. First part of the paper describes the CIA model. Then, the model is solved. Model parameters are estimated with Bayesian technique on the quarterly Czech economy data. The final part investigates estimation results and impulse responses for the Czech economy.
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