An Estimated Dynamic Stochastic General Equilibrium Model of the Jordanian Economy
AbstractThis paper presents and estimates a small open economy dynamic stochastic general-equilibrium model (DSGE) for the Jordanian economy. The model features nominal and real rigidities, imperfect competition and habit formation in the consumer’s utility function. Oil imports are explicitly modeled in the consumption basket and domestic production. Bayesian estimation methods are employed on quarterly Jordanian data. The model’s properties are described by impulse response analysis of identified structural shocks pertinent to the economy. These properties assess the effectiveness of the pegged exchange rate regime in minimizing inflation and output trade-offs. The estimates of the structural parameters fall within plausible ranges, and simulation results suggest that while the peg amplifies output, consumption and (price and wage) inflation volatility, it offers a relatively low risk premium.
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Bibliographic InfoPaper provided by International Monetary Fund in its series IMF Working Papers with number 11/28.
Date of creation: 01 Feb 2011
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This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-02-26 (All new papers)
- NEP-ARA-2011-02-26 (MENA - Middle East & North Africa)
- NEP-CBA-2011-02-26 (Central Banking)
- NEP-CMP-2011-02-26 (Computational Economics)
- NEP-CWA-2011-02-26 (Central & Western Asia)
- NEP-DGE-2011-02-26 (Dynamic General Equilibrium)
- NEP-MAC-2011-02-26 (Macroeconomics)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Levine's Working Paper Archive
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- Mohaddes, K. & Raissi, M., 2011.
"Oil Prices, External Income, and Growth: Lessons from Jordan,"
Cambridge Working Papers in Economics
1164, Faculty of Economics, University of Cambridge.
- Mohaddes Kamiar & Raissi Mehdi, 2013. "Oil Prices, External Income, and Growth: Lessons from Jordan," Review of Middle East Economics and Finance, De Gruyter, vol. 9(2), pages 99-131, August.
- Mehdi Raissi & Kamiar Mohaddes, 2011. "Oil Prices, External Income, and Growth: Lessons from Jordan," IMF Working Papers 11/291, International Monetary Fund.
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