Business Cycle and Monetary Policy Analysis in a Structural Sticky- Price Model of The Euro Area
AbstractStructural models are a powerful tool for business cycle and monetary policy analysis because they are assumed to be invariant to either policy changes or external shoxks. In this paper, we derive a neoclassical monetary model in which both the demand and supply side are setructural in the sense that the behavioral equations obtaind are regorously calculated from optimizing decisions of the individuals. Moerover, we introduce price stickiness on the supply side decisions so as to have relevant short-run real effects of monetary policy through the rreal interest rate channel. The resulting medium-size model will be calibrated and estimated for the euro area economies. As two examples of the applications of the model for the euro area, some simulations on business cycle and monetary policy analysis will be carried out.
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Bibliographic InfoPaper provided by Departamento de Economía - Universidad Pública de Navarra in its series Documentos de Trabajo - Lan Gaiak Departamento de Economía - Universidad Pública de Navarra with number 0109.
Length: 38 pages
Date of creation: 2001
Date of revision:
Publication status: Published in
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Other versions of this item:
- Casares, Miguel, 2001. "Business cycle and monetary policy analysis in a structural sticky-price model of the euro area," Working Paper Series 0049, European Central Bank.
- E20 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - General (includes Measurement and Data)
- E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
- E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
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