A Partial Dynamic Stochastic General Equilibrium Model of the Czech Economy
| Authors | |
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| Year of publication | 2007 |
| Type | Article in Proceedings |
| Conference | Mathematical Methods in Economics 2007 |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | New Keynesian DSGE model; partial model of the Czech economy; monetary policy; Taylor rule; inflation targeting; rational expectations; Bayesian estimation |
| Description | The paper introduces a partial New Keynesian Dynamic Stochastic General Equilibrium (NK DSGE) model of the Czech economy. It is a closed economy model based on microeconomic foundations. The model consists of four representative agents. These are households (optimizing behavior contains habit formation in consumption), firms (forming a New Keynesian Phillips Curve as a result of Calvo style price policy), central bank (implementing monetary policy in accordance with a modified Taylor rule), and government (as an exogenous sector). For the estimation of the log linearized model is employed a Bayesian estimation technique. Estimated parameters are analyzed in a form of a description of their values and impulse response functions of a monetary policy shock. The model can be extended to a form of a two economy model (open economy model with endogenous foreign sector). |
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