Structural Differences and Asymmetric Shocks between the Czech Economy and the Euro Area 12

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Authors	SLANICAY Martin
Year of publication	2011
Type	Article in Periodical
Magazine / Source	Národohospodářský obzor – Review of Economic Perspectives
MU Faculty or unit	Faculty of Economics and Administration
Citation
Field	Economy
Keywords	New Keynesian; DSGE model; Bayes factor; Bayesian estimation; structural differences; asymmetric shocks; model comparison
Description	The goal of this paper is to determine whether there exist asymmetric shocks and structural differences between the Czech economy and the Euro Area 12. A New Keynesian DSGE model of a small open economy is used for this purpose. Asymmetric shocks and structural differences are examined in two ways. Firstly, I examine asymmetry of shocks and sources of structural differences, using model comparison based on the Bayes factor. Secondly, I investigate impact of structural differences and differences in persistence and volatility of structural shocks on the behavior of both economies, using analysis of impulse-response functions.
Related projects:	Research Centre for the Competitiveness of the Czech Economy