Arbeitspapier
Welfare effects of business cycles and monetary policies in a small open emerging economy
This paper evaluates the welfare cost of business cycles and the effects of monetary policies in a DSGE model tailored to a small open emerging economy. The model generates rich business cycle fluctuations, features labor market idiosyncratic risks and accounts for imperfect financial and capital markets inclusion. In this context, households excluded from financial and capital markets experience larger costs of business cycle fluctuations due to their inability to hedge against labor market idiosyncratic risks. Different degrees of exposure to different types of risks generate divergent preferences regarding the conduct of monetary policy. While a strong response to inflation deviation from target maximizes welfare for included households, excluded households benefit the most from unemployment and wage stabilization policies.
- Language
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Englisch
- Bibliographic citation
-
Series: NBB Working Paper ; No. 376
- Classification
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Wirtschaft
Monetary Policy
Business Fluctuations; Cycles
Model Construction and Estimation
- Subject
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Monetary policy
financial exclusion
idiosyncratic risks
labor markets
emerging economies
SOE
DSGE
- Event
-
Geistige Schöpfung
- (who)
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Mohimont, Jolan
- Event
-
Veröffentlichung
- (who)
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National Bank of Belgium
- (where)
-
Brussels
- (when)
-
2019
- Handle
- Last update
-
10.03.2025, 11:41 AM CET
Data provider
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Mohimont, Jolan
- National Bank of Belgium
Time of origin
- 2019
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