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Monetary Policy in a Small Open Economy Model: A DSGE-VAR Approach for Switzerland


  • Gregor Bäurle

    () (University of Bern)

  • Tobias Menz

    () (University of Bern and Study Center Gerzensee)


We study the transmission of monetary shocks and monetary policy with a behavioral model, corrected for potential misspecification using the DSGE-VAR framework elaborated by DelNegro and Schorfheide (2004). In particular, we investigate if the central bank should react to movements in the nominal exchange rate. We contribute to the empirical literature as we use Swiss data, which is very rarely used in that context.

Suggested Citation

  • Gregor Bäurle & Tobias Menz, 2008. "Monetary Policy in a Small Open Economy Model: A DSGE-VAR Approach for Switzerland," Working Papers 08.03, Swiss National Bank, Study Center Gerzensee.
  • Handle: RePEc:szg:worpap:0803

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    Cited by:

    1. SENBETA, Sisay Regassa, 2013. "Foreign exchange constraints and macroeconomic dynamics in a small open economy," Working Papers 2013023, University of Antwerp, Faculty of Applied Economics.
    2. Stefan Leist & Klaus Neusser, 2010. "Measuring the Natural Output Level by DSGE Models: An Empirical Investigation for Switzerland," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 146(I), pages 275-300, March.
    3. Barbara Rudolf & Mathias Zurlinden, 2014. "A compact open economy DSGE model for Switzerland," Economic Studies 2014-08, Swiss National Bank.

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