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"Simulation, estimation and welfare implications of monetary policies in a 3-country NOEM model." NBB Working Paper No. 94, October 2006

Plasmans, Joseph, and Michalak, Tomasz, and Fornero, Jorge. (2006) "Simulation, estimation and welfare implications of monetary policies in a 3-country NOEM model." NBB Working Paper No. 94, October 2006. [Working Paper]

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    Abstract

    In this paper we derive a microfounded macro New Keynesian model for open economies, be them large or small. We consider habit formation in consumption, sectoral linkages, domestic and foreign governments, tradable and non-tradable final and intermediate goods and imperfect pass-through in these sectors. Sticky nominal prices and wages are modeled in a Calvo way. The model economy is composed of a continuum of infinitely-lived consumers and producers for three regions (countries). Numerical simulations and econometric estimations are presented with a focus on a small open economy member of the EMU. Welfare implications of the involved price and wage rigidities are discussed.

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    Item Type: Working Paper
    Uncontrolled Keywords: New Keynesian open economy model; tradable and non-tradable sectors. intermediate goods, monetary policy rules, numerical simulations, Bayesian estimation, welfare implications.
    Subjects for non-EU documents: EU policies and themes > Policies & related activities > economic and financial affairs > monetary policy
    EU policies and themes > Policies & related activities > social policy > welfare state
    Countries > Netherlands
    Subjects for EU documents: UNSPECIFIED
    EU Series and Periodicals: UNSPECIFIED
    EU Annual Reports: UNSPECIFIED
    Series: Series > National Bank of Belgium (Brussels) > Working Papers
    Depositing User: Phil Wilkin
    Official EU Document: No
    Language: English
    Date Deposited: 22 Mar 2008
    Page Range: p. 74
    Last Modified: 15 Feb 2011 17:49
    URI: http://aei.pitt.edu/id/eprint/7608

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