The economic consequences of Euro-area macro-modelling shortcuts

Journal article | Zeitschriftenartikel

Should euro-area economies be modelled in an aggregate (area-wide) fashion or in a disaggregate (multi-country) one? This paper tackles that question from both a statistical and an economic viewpoint. From a statistical viewpoint, aggregation bias criteria are found to signal that the degree of structural heterogeneity among euro-area economies is such that the loss of information entailed by an aggregate modelling approach may be far from trifling. From an economic viewpoint, we investigate the following issue: Are those statistically detectable heterogeneities of any practical relevance when it comes to supporting monetary policy decision-making? To provide an answer to this question, we compute simple optimal monetary policy reaction functions on the basis of either an aggregate model or a disaggregate one, and compare the associated welfare losses. The results suggest that the welfare under-performance of an area-wide-model-based rule is not only non negligible, but also robust with respect to a number of sensitivity analyses.

Angaben zum Objekt

• Umfang: Seite(n): 2399-2415
• Sprache: Englisch
• Anmerkungen: Status: Postprint; begutachtet (peer reviewed)

Verweise und Beziehungen

• Erschienen in: Applied Economics, 42(19)

Klassifikation und Themen

• Thema: Wirtschaft ; Politikwissenschaft ; Wirtschaftsstatistik, Ökonometrie, Wirtschaftsinformatik ; Europapolitik ; Wirtschaftspolitik ; Geldpolitik ; Aggregation

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Monteforte, Libero ; Siviero, Stefano
• Ereignis: Veröffentlichung
• (wo): Vereinigte Staaten von Amerika
• (wann): 2008

Weitere Informationen

• DOI: https://doi.org/10.1080/00036840701858075
• URN: urn:nbn:de:0168-ssoar-242456
• Rechteinformation: GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
• Letzte Aktualisierung: 21.06.2024, 16:27 MESZ