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BEMOD: a DSGE model for the Spanish economy and the rest of the Euro area

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Author Info

  • Javier Andrés

    () (Banco de España, Universidad de Valencia)

  • Pablo Burriel

    () (Banco de España)

  • Ángel Estrada

    (Oficina Económica de Presidencia del Gobierno)

Abstract

In this paper we present the theoretical foundations and the simulation results obtained with a new dynamic general equilibrium model developed at the Banco de España for the Spanish economy and the rest of Euro area. The model is designed to help in simulating the effect of alternative shocks on the main aggregate variables. The main contributions of this work from a theoretical perspective are the modelling of a monetary union composed of two regions, the inclusion of housing as a durable good with its own sector of production and the degree and detail of the disaggregation considered for each country in the model, which replicates the Quarterly National Accounts. On the empirical side, the main contribution is the detailed calibration of the most important ratios of the Spanish and rest of the Euro area economies.

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File URL: http://www.bde.es/webbde/SES/Secciones/Publicaciones/PublicacionesSeriadas/DocumentosTrabajo/06/Fic/dt0631e.pdf
File Function: First version, November 2006
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Bibliographic Info

Paper provided by Banco de España in its series Banco de España Working Papers with number 0631.

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Length: 97 pages
Date of creation: Nov 2006
Date of revision:
Handle: RePEc:bde:wpaper:0631

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Keywords: sdge model; open economy; simulation; shocks; macroeconomic policies;

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  11. Erceg, Christopher & Guerriei, Luca & Gust, Christopher, 2006. "SIGMA: A New Open Economy Model for Policy Analysis," MPRA Paper 813, University Library of Munich, Germany.
  12. Adolfson, Malin & Laséen, Stefan & Lindé, Jesper & Villani, Mattias, 2005. "Bayesian Estimation of an Open Economy DSGE Model with Incomplete Pass-Through," Working Paper Series 179, Sveriges Riksbank (Central Bank of Sweden).
  13. Sbordone, Argia M., 2002. "Prices and unit labor costs: a new test of price stickiness," Journal of Monetary Economics, Elsevier, vol. 49(2), pages 265-292, March.
  14. Kortelainen, Mika, 2002. "EDGE: a model of the euro area with applications to monetary policy," Scientific Monographs E:23/2002, Bank of Finland.
  15. Christopher J. Erceg & Andrew T. Levin, 2002. "Optimal monetary policy with durable goods and non-durable goods," Working Paper Series 179, European Central Bank.
  16. Frank Smets & Raf Wouters, 2003. "An Estimated Dynamic Stochastic General Equilibrium Model of the Euro Area," Journal of the European Economic Association, MIT Press, vol. 1(5), pages 1123-1175, 09.
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