Arbeitspapier
Monetary policy trade-offs in an estimated open-economy DSGE model
This paper studies the transmission of shocks and the trade-offs between stabilizing CPI inflation and alternative measures of the output gap in Ramses, the Riksbank's empirical dynamic stochastic general equilibrium (DSGE) model of a small open economy. The main results are, first, that the transmission of shocks depends substantially on the conduct of monetary policy, and second, that the trade-off between stabilizing CPI inflation and the output gap strongly depends on which concept of potential output in the output gap between output and potential output is used in the loss function. If potential output is defined as a smooth trend this trade-off is much more pronounced compared to the case when potential output is defined as the output level that would prevail if prices and wages were flexible.
- Language
-
Englisch
- Bibliographic citation
-
Series: Sveriges Riksbank Working Paper Series ; No. 232
- Classification
-
Wirtschaft
Monetary Policy
Central Banks and Their Policies
- Subject
-
impulse responses
instrument rules
open-economy DSGE models
Optimal monetary policy
output gap
potential output
Schock
Gesamtwirtschaftliche Produktion
Inflationsrate
Geldpolitik
Dynamisches Gleichgewicht
Kleine offene Volkswirtschaft
- Event
-
Geistige Schöpfung
- (who)
-
Adolfson, Malin
Laséen, Stefan
Lindé, Jesper
Svensson, Lars E.O.
- Event
-
Veröffentlichung
- (who)
-
Sveriges Riksbank
- (where)
-
Stockholm
- (when)
-
2009
- Handle
- Last update
-
10.03.2025, 11:42 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
- Adolfson, Malin
- Laséen, Stefan
- Lindé, Jesper
- Svensson, Lars E.O.
- Sveriges Riksbank
Time of origin
- 2009
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