An estimated Canadian DSGE model with nominal and real rigidities

An Estimated Canadian DSGE Model with Nominal and Real Rigidities

This paper develops a dynamic, stochastic, general-equilibrium (DSGE) model for the Canadian economy and evaluates the real effects of monetary policy shocks. To generate high and persistent real effects, the model combines nominal frictions in the form of costly price adjustment with real rigidities modelled as convex costs of adjusting capital and employment. The structural parameters identif...

Wage rigidities in an estimated DSGE model of the UK labour market

This paper estimates a New Keynesian model with matching frictions and nominal wage rigidities on UK data. The estimation enables the identification of important structural parameters of the British economy, the recovery of the unobservable shocks that affected the UK economy since 1975 and the study of the transmission mechanism. Results show that with matching frictions wage rigidities have l...

A Small Estimated Euro-Area Model with Rational Expectations and Nominal Rigidities

With the formation of European Monetary Union (EMU) in 1999, the eleven countries that adopted the Euro began to conduct a single monetary policy oriented towards unionwide objectives. The objective of this paper is to construct a small model of the Euro area, which may serve as a laboratory for evaluating the performance of alternative monetary policy strategies for the Euro area in the vein o...

Unexpected Banking Loan Losses in an Estimated DSGE Model

  In spite of realizing more loss than expected and reserved provision in loaning process, some of our banks avoid recognizing the losses, through extension of the loan contracts and consequently do not shift the realized losses to their capital. With this in mind, the major objective of this study is to design a frame-work, through which we can explain the differences between the results of t...

Introducing nominal rigidities. A static model