An estimated dynamic stochastic general equilibrium model of the euro area
read more
Citations
Optimal Monetary Policy Rules for the Euro Area: An Analysis Using the Area Wide Model*
The Business Cycle Implications of Banks' Maturity Transformation
The reset inflation puzzle and the heterogeneity in price stickiness
DSGE Models in the Frequency Domains
A Two-Pillar DSGE Monetary Policy Model for the Euro Area
References
Staggered prices in a utility-maximizing framework
Discretion versus policy rules in practice
Time to build and aggregate fluctuations
The Science of Monetary Policy: A New Keynesian Perspective
The Dynamic Effects of Aggregate Demand and Supply Disturbances
Related Papers (5)
Frequently Asked Questions (5)
Q2. What is the effect of a positive preference shock on investment?
Graph 7 shows that a positive preference shock, while increasing consumption and output significantly, has a significant negative crowding-out effect on investment.
Q3. What is the argument that monetary authorities should not accommodate such variations?
As these shocks give rise to inefficient variations in the flexible-price-and-wage level of output, one can argue that monetary authorities should not accommodate such variations and instead try to keep output at its efficient level.
Q4. What are the parameters that can be estimated from the mean of the observable variables?
Most of these parameters can be directly related to the steady-state values of the state variables and could therefore be estimated from the means of the observable variables (or linear combinations of them).
Q5. What is the degree of stickiness of the price and wage curves?
Only when they assume decreasing returns to scale and an upward-sloping marginal cost curve, Gali, Gertler and LopezSalido (2000) estimate a more reasonable degree of price stickiness that is comparable with what the authors estimate for wages.