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Evaluating a monetary business cycle model with unemployment for the euro area

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This paper estimates a medium-scale DSGE model with search unemployment by matching model and data spectra. Price markup shocks emerge as the main source of business-cycle fluctuations in the euro area. Key for the propagation of these disturbances are a high degree of inflation ndexation and a persistent response of monetary policy to deviations of inflation from the target.

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File URL: http://www.rbnz.govt.nz/research_and_publications/discussion_papers/2009/dp09_08.pdf
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Bibliographic Info

Paper provided by Reserve Bank of New Zealand in its series Reserve Bank of New Zealand Discussion Paper Series with number DP2009/08.

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Length: 44 p
Date of creation: Sep 2009
Date of revision:
Handle: RePEc:nzb:nzbdps:2009/08

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Cited by:
  1. Mathias Trabandt & Karl Walentin & Lawrence J. Christiano, 2010. "Involuntary Unemployment and the Business Cycle," 2010 Meeting Papers, Society for Economic Dynamics 129, Society for Economic Dynamics.
  2. Lawrence J. Christiano & Mathias Trabandt & Karl Walentin, 2010. "DSGE Models for Monetary Policy Analysis," NBER Working Papers 16074, National Bureau of Economic Research, Inc.
  3. Groshenny, Nicolas, 2013. "Monetary Policy, Inflation And Unemployment: In Defense Of The Federal Reserve," Macroeconomic Dynamics, Cambridge University Press, Cambridge University Press, vol. 17(06), pages 1311-1329, September.

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