IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v95y2024ics1059056024004611.html

Macroeconomic and trade policy impacts based on DSGE model

Author

Listed:
  • Zhan, Jinliang

Abstract

In the context of economic de-globalization, especially the impact of COVID-19, the adjustment of one country's macroeconomic and trade policies will have spillover effects on trading partners. Build DSGE models between the two countries, in which Epstein - Zin utility function replacement time can be divided into the utility function, to solve the model, using the second order approximate solution technology with particle filter to estimate the parameters, and analysis of the open economy under the background of a country's technological progress, monetary policy, labor supply, government spending and tariff policy on macroeconomic impact between the two countries. It is found that the impact of China's technological progress on F country's macro economy is greater than that of F country on China. The spillover effect of monetary policy on another country's macro economy will change the consumption structure of both countries. The impact of China's labor supply shock on the total investment of F country is greater than that of F country on China. The positive impact of government spending on another country's inflation rate is lower than other policy shocks. The impact of the positive impact of government expenditure in F country on China's aggregate demand is greater than that of China on F country.

Suggested Citation

  • Zhan, Jinliang, 2024. "Macroeconomic and trade policy impacts based on DSGE model," International Review of Economics & Finance, Elsevier, vol. 95(C).
    • Handle: RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024004611
    DOI: 10.1016/j.iref.2024.103469
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024004611
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.103469?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Can, Ufuk & Can, Zeynep Gizem & Bocuoglu, Mehmet Emin & Dogru, Muhammed Erkam, 2021. "The effectiveness of the post-Covid-19 recovery policies: Evidence from a simulated DSGE model for Turkey," Economic Analysis and Policy, Elsevier, vol. 71(C), pages 694-708.
    2. Ali, Syed Zahid & Anwar, Sajid, 2018. "Anticipated versus unanticipated terms of trade shocks and the J-curve phenomenon," Journal of International Money and Finance, Elsevier, vol. 81(C), pages 1-19.
    3. Jesús Fernández-Villaverde & Juan F. Rubio-Ramírez, 2007. "Estimating Macroeconomic Models: A Likelihood Approach," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 74(4), pages 1059-1087.
    4. Verónica Acurio Vásconez & Olivier Damette & David W. Shanafelt, 2021. "Macroepidemics and unconventional monetary policy: Coupling macroeconomics and epidemiology in a financial DSGE-SIR framework," Working Papers of BETA 2021-04, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
    5. Hove, Seedwell & Touna Mama, Albert & Tchana Tchana, Fulbert, 2015. "Monetary policy and commodity terms of trade shocks in emerging market economies," Economic Modelling, Elsevier, vol. 49(C), pages 53-71.
    6. Calvo, Guillermo A., 1983. "Staggered prices in a utility-maximizing framework," Journal of Monetary Economics, Elsevier, vol. 12(3), pages 383-398, September.
    7. Klein, Paul, 2000. "Using the generalized Schur form to solve a multivariate linear rational expectations model," Journal of Economic Dynamics and Control, Elsevier, vol. 24(10), pages 1405-1423, September.
    8. Warwick McKibbin & Roshen Fernando, 2021. "The Global Macroeconomic Impacts of COVID-19: Seven Scenarios," Asian Economic Papers, MIT Press, vol. 20(2), pages 1-30, Summer.
    9. Frank Smets & Rafael Wouters, 2007. "Shocks and Frictions in US Business Cycles: A Bayesian DSGE Approach," American Economic Review, American Economic Association, vol. 97(3), pages 586-606, June.
    10. Engler, Philipp & Tervala, Juha, 2018. "Welfare effects of TTIP in a DSGE model," Economic Modelling, Elsevier, vol. 70(C), pages 230-238.
    11. Larry G. Epstein & Stanley E. Zin, 2013. "Substitution, risk aversion and the temporal behavior of consumption and asset returns: A theoretical framework," World Scientific Book Chapters, in: Leonard C MacLean & William T Ziemba (ed.), HANDBOOK OF THE FUNDAMENTALS OF FINANCIAL DECISION MAKING Part I, chapter 12, pages 207-239, World Scientific Publishing Co. Pte. Ltd..
    12. Schmitt-Grohe, Stephanie & Uribe, Martin, 2004. "Solving dynamic general equilibrium models using a second-order approximation to the policy function," Journal of Economic Dynamics and Control, Elsevier, vol. 28(4), pages 755-775, January.
    13. Gertler, Mark & Karadi, Peter, 2011. "A model of unconventional monetary policy," Journal of Monetary Economics, Elsevier, vol. 58(1), pages 17-34, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Tidiane Guindo, 2026. "Who absorbs external shocks? foreign exchange intervention, monetary policy, and stabilization trade-offs: a DSGE study of ASEAN economies," SN Business & Economics, Springer, vol. 6(2), pages 1-32, February.
    2. Alejandro Steven Fonseca-Zendejas & Carmen Borrego-Salcido & Francisco Venegas-Martínez, 2025. "An Estimated DSGE Model Under the New Keynesian Framework for Mexico," Computational Economics, Springer;Society for Computational Economics, vol. 66(2), pages 1297-1320, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jesús Fernández-Villaverde, 2010. "The econometrics of DSGE models," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 1(1), pages 3-49, March.
    2. Schmidt, Sebastian & Wieland, Volker, 2013. "The New Keynesian Approach to Dynamic General Equilibrium Modeling: Models, Methods and Macroeconomic Policy Evaluation," Handbook of Computable General Equilibrium Modeling, in: Peter B. Dixon & Dale Jorgenson (ed.), Handbook of Computable General Equilibrium Modeling, edition 1, volume 1, chapter 0, pages 1439-1512, Elsevier.
    3. Andrei Polbin & Sergey Drobyshevsky, 2014. "Developing a Dynamic Stochastic Model of General Equilibrium for the Russian Economy," Research Paper Series, Gaidar Institute for Economic Policy, issue 166P, pages 156-156.
    4. Andrew Foerster & Juan F. Rubio-Ramirez & Daniel F. Waggoner & Tao Zha, 2013. "Perturbation methods for Markov-switching DSGE models," FRB Atlanta Working Paper 2013-01, Federal Reserve Bank of Atlanta.
    5. Böhl, Gregor & Strobel, Felix, 2020. "US business cycle dynamics at the zero lower bound," IMFS Working Paper Series 143, Goethe University Frankfurt, Institute for Monetary and Financial Stability (IMFS).
    6. Gregor Boehl & Gavin Goy & Felix Strobel, 2024. "A Structural Investigation of Quantitative Easing," The Review of Economics and Statistics, MIT Press, vol. 106(4), pages 1028-1044, July.
    7. Christian Bayer & Benjamin Born & Ralph Luetticke, 2024. "Shocks, Frictions, and Inequality in US Business Cycles," American Economic Review, American Economic Association, vol. 114(5), pages 1211-1247, May.
    8. Anmol Bhandari & Jaroslav Borovička & Paul Ho, 2025. "Survey Data and Subjective Beliefs in Business Cycle Models," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 92(3), pages 1375-1437.
    9. Iania, Leonardo & Tretiakov, Pavel & Wouters, Rafael, 2023. "The risk premium in New Keynesian DSGE models: The cost of inflation channel," Journal of Economic Dynamics and Control, Elsevier, vol. 155(C).
    10. Turdaliev, Nurlan & Zhang, Yahong, 2019. "Household debt, macroprudential rules, and monetary policy," Economic Modelling, Elsevier, vol. 77(C), pages 234-252.
    11. Oliver de Groot, 2014. "The Risk Channel of Monetary Policy," International Journal of Central Banking, International Journal of Central Banking, vol. 10(2), pages 115-160, June.
    12. Fernández-Villaverde, J. & Rubio-Ramírez, J.F. & Schorfheide, F., 2016. "Solution and Estimation Methods for DSGE Models," Handbook of Macroeconomics, in: J. B. Taylor & Harald Uhlig (ed.), Handbook of Macroeconomics, edition 1, volume 2, chapter 0, pages 527-724, Elsevier.
    13. Ferman, Marcelo, 2011. "Switching monetary policy regimes and the nominal term structure," LSE Research Online Documents on Economics 119070, London School of Economics and Political Science, LSE Library.
    14. Marcelo Ferman, 2011. "Switching Monetary Policy Regimes and the Nominal Term Structure," FMG Discussion Papers dp678, Financial Markets Group.
    15. Martin Kliem & Alexander Meyer‐Gohde, 2022. "(Un)expected monetary policy shocks and term premia," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 37(3), pages 477-499, April.
    16. Wieland, Volker & Cwik, Tobias & Müller, Gernot J. & Schmidt, Sebastian & Wolters, Maik, 2012. "A new comparative approach to macroeconomic modeling and policy analysis," Journal of Economic Behavior & Organization, Elsevier, vol. 83(3), pages 523-541.
    17. Gabriel Bruneau & Ian Christensen & Césaire Meh, 2018. "Housing market dynamics and macroprudential policies," Canadian Journal of Economics, Canadian Economics Association, vol. 51(3), pages 864-900, August.
    18. Mohimont, Jolan, 2022. "Welfare effects of business cycles and monetary policies in a small open emerging economy," Journal of Economic Dynamics and Control, Elsevier, vol. 136(C).
    19. Yin Germaschewski, 2022. "House price, credit supply, and government policy in China," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 55(2), pages 971-1026, May.
    20. Coenen, Günter & Karadi, Peter & Schmidt, Sebastian & Warne, Anders, 2018. "The New Area-Wide Model II: an extended version of the ECB’s micro-founded model for forecasting and policy analysis with a financial sector," Working Paper Series 2200, European Central Bank.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:95:y:2024:i:c:s1059056024004611. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.