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An Estimated, New Keynesian Policy Model for Australia

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  • Martin Melecky

    (University of New South Wales, School of Economics)

  • Daniel Buncic

    (University of New South Wales, School of Economics)

Abstract

A two-block open economy model is estimated in this paper using Australian and U.S. data. Evaluation of the estimated model is carried out in relation to a simple closed economy alternative. Namely, we inspect the implied transmission mechanisms, and examine the relative out-of-sample forecasting performance of the closed and open economy models.

Suggested Citation

  • Martin Melecky & Daniel Buncic, 2005. "An Estimated, New Keynesian Policy Model for Australia," Macroeconomics 0511026, University Library of Munich, Germany.
  • Handle: RePEc:wpa:wuwpma:0511026
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    More about this item

    Keywords

    DSGE Model; Open Economy; Australia; U.S.; Bayesian Estimation.;
    All these keywords.

    JEL classification:

    • F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
    • E40 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - General
    • E37 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Forecasting and Simulation: Models and Applications
    • C11 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Bayesian Analysis: General

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