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An Analysis Of Domestic And External Shocks On Romanian Economy Using A Dsge Model

  • Caraiani, Petre


    (Institute for Economic Forecasting, Romanian Academy, Bucharest)

In this paper, I study the impact of the domestic and external shocks on the Romanian economy. I use an open economy DSGE model and estimate it for the Romanian economy using Bayesian techniques. The impact of the domestic shocks is moderate but not persistent. The Euro Area demand and interest rate shocks have a moderate impact on the domestic output. The Euro Area supply and interest rate shocks have significant and persistent impacts on the domestic inflation. I also perform a long-run variance decomposition of the domestic variables.

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Article provided by Institute for Economic Forecasting in its journal Romanian Journal for Economic Forecasting.

Volume (Year): 5 (2008)
Issue (Month): 3 (September)
Pages: 100-114

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Handle: RePEc:rjr:romjef:v:5:y:2008:i:3:p:100-114
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  1. Mark Gertler & Jordi Gali & Richard Clarida, 1999. "The Science of Monetary Policy: A New Keynesian Perspective," Journal of Economic Literature, American Economic Association, vol. 37(4), pages 1661-1707, December.
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  8. Caraiani, Petre, 2007. "An Estimated New Keynesian Model for Romania," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 4(4), pages 114-123, December.
  9. Albu, Lucian Liviu, 2001. "Evolution Of Inflation-Unemployment Relationship In The Perspective Of Romania’S Accession To Eu," Journal for Economic Forecasting, Institute for Economic Forecasting, vol. 0(3), pages 5-23, December.
  10. Pau Rabanal & Juan Rubio-Ramírez, 2008. "Comparing new Keynesian models in the Euro area: a Bayesian approach," Spanish Economic Review, Springer, vol. 10(1), pages 23-40, March.
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  13. Tommaso Monacelli, 2003. "Monetary Policy in a Low Pass-Through Environment," Working Papers 228, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
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