A Baseline Closed Economy Model for Monetary Policy Analysis

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Authors	TONNER Jaromír POLANSKÝ Jiří VAŠÍČEK Osvald
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
Citation
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.
Related projects:	Research Centre for the Competitiveness of the Czech Economy