DSGE modelling for the UK economy 1974–2017
Date
2020-08-13Author
Litsios, Ioannis
Pilbeam, K
Asteriou, D
Subject
DSGE long run dynamics monetary-fiscal-technology shocks price rigidities short run dynamics simulated business cycles small open economy wage rigidities
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Show full item recordAbstract
<jats:title>Abstract</jats:title><jats:p>We build four different dynamic stochastic general equilibrium (DSGE) models for a small open economy reflecting both neoclassical and Keynesian specifications. A DSGE model with full price and wage flexibility is initially constructed and then modified through nominal wage and price rigidities. The ability of the models to replicate important features of the business cycle activity in the UK is explored through statistical and econometric analysis. Evidence suggests that a monetary shock under the Taylor model with price stickiness can replicate a significant portion of the business cycle activity in the UK economy.</jats:p>
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Publisher
Wiley
Journal
Bulletin of Economic Research
Volume
73
Issue
2
Pagination
295-323
Number
boer.12255
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