Expectations in a Baseline DSGE Closed Economy Model

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Authors

POLANSKÝ Jiří TONNER Jaromír VAŠÍČEK Osvald

Year of publication 2009
Type Article in Proceedings
Conference Mathematical Methods in Economics 2009
MU Faculty or unit

Faculty of Economics and Administration

Citation
Field Economy
Keywords Expectations; DSGE model; anticipated shocks
Description In our contribution, we analyze fully anticipated shocks in a medium-scale closed economy DSGE model a compare them to unanticipated shocks. An anticipated shock might bring about significant adjustments of agents' behavior before time when a shock hits the economy. From a practical policy side, modelling of anticipated shocks can be a useful tool for a policy forecasting since we admit relevance of rational expectations in reality.
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