Arbeitspapier
Two-country new Keynesian DSGE model: A small open economy as a limit case
We build a two-country version of the model in Gali & Monacelli (2005), which extends for a small open economy the new Keynesain DSGE model used as tool for monetary policy analysis in closed economies. A distinctive feature of the model is that the terms of trade enters directly into the new Keynesian Phillips curve as a new pushing-cost variable feeding the inflation. Furthermore, home bias in households' preferences allows for real exchange rate fluctuation, giving rise to alternative channels of monetary transmission. Unlike most part of the literature, the small domestic open economy is derived as a limit case of the two-coutry model, rather than assuming exogenous processes for the foreign variables. This procedure preserves the role played by foreign nominal frictions in the way as international monetary policy shocks are conveyed into the small domestic economy.
- Sprache
-
Englisch
- Erschienen in
-
Series: Discussion Paper ; No. 164
- Klassifikation
-
Wirtschaft
Business Fluctuations; Cycles
Monetary Policy
Open Economy Macroeconomics
- Thema
-
new Keynesian Phillips curve
sticky prices
home bias
open economy
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Coutinho da Silveira, Marcos Antonio
- Ereignis
-
Veröffentlichung
- (wer)
-
Institute for Applied Economic Research (ipea)
- (wo)
-
Brasília
- (wann)
-
2015
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:43 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Coutinho da Silveira, Marcos Antonio
- Institute for Applied Economic Research (ipea)
Entstanden
- 2015
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