- Tytuł:
- Solving Forward-Looking Models of Cross-Country Adjustment within the Euro Area
- Autorzy:
- Torój, Andrzej
- Powiązania:
- https://bibliotekanauki.pl/articles/483343.pdf
- Data publikacji:
- 2009
- Wydawca:
- Polska Akademia Nauk. Czytelnia Czasopism PAN
- Tematy:
-
solving rational expectations models
generalized Schur decomposition
heterogenous information sets
method of Christiano
divergences in EMU - Opis:
- This article introduces and applies two refinements to the algorithm of solving rational expectations models of a currency union. Firstly, building upon Klein (2000), it generalizes the standard methods of solving rational expectations models to the case of time-varying nonstochastic parameters, recurring in a finite cycle. Such a specification occurs in a simple stylized New Keynesian model of the euro area after a joint introduction of (i) rotation in the ECB Governing Council (as constituted by the Treaty of Nice) and (ii) home bias in the interest rate decisions preferred by its members. Secondly, we apply the method of Christiano (2002) to solve the model with heterogenous information sets. This is justified if we argue that the information set of domestic economic agents in a currency union is home-biased (i.e. foreign shocks enter only with a lag). Both methods of solution are illustrated with simulation results.
- Źródło:
-
Central European Journal of Economic Modelling and Econometrics; 2009, 1, 3; 211-241
2080-0886
2080-119X - Pojawia się w:
- Central European Journal of Economic Modelling and Econometrics
- Dostawca treści:
- Biblioteka Nauki
Artykuł