Labor Market Rigidities and Monetary Switch in a DSGE Model: Application To The Slovak Economy
| Authors | |
|---|---|
| Year of publication | 2016 |
| Type | Article in Proceedings |
| Conference | Quantitative Methods in Economics; Multiple Criteria Decision Making XVIII |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | DSGE model; labor market; frictions; Slovak economy; switch |
| Description | This paper investigates the structural and dynamical characteristics of the Slovak economy during the last 13 years. The focus lies mainly in the examination of the Slovak labor market. To achieve our goal, we use a dynamic stochastic general equilibrium model for small open economies. The selected model contains several labor market rigidities, like search and matching processes, wage adjustment costs and hiring costs to improve our results of estimation. Furthermore, we augment the model with switching mechanism to capture the entry of Slovak Republic into the Eurozone, therefore abandoning its autonomous monetary policy. Our results suggest that there are significant rigidities in the Slovak labor market. Also, the Slovak Republic is greatly influenced by foreign economic forces. |
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