Arbeitspapier
A Small Estimated Euro Area Model with Rational Expectations and Nominal Rigidities
In this paper we estimate a small model of the euro area to be used as a laboratory for evaluating the performance of alternative monetary policy strategies. We start with the relationship between output and inflation and investigate the fit of the nominal wage contracting model due to Taylor (1980)and three different versions of the relative real wage contracting model proposed by Buiter and Jewitt (1981)and estimated by Fuhrer and Moore (1995a) for the United States. While Fuhrer and Moore reject the nominal contracting model in favor of the relative contracting model which induces more inflation persistence, we find that both models fit euro area data reasonably well. When considering France, Germany and Italy separately, however, we find that the nominal contracting model fits German data better, while the relative contracting model does quite well in countries which transitioned out of a high inflation regime such as France and Italy. We close the model by estimating an aggregate demand relationship and investigate the consequences of the different wage contracting specifications for the inflation-output variability tradeoff, when interest rates are set according to Taylor's rule.
- Sprache
-
Englisch
- Erschienen in
-
Series: CFS Working Paper ; No. 2003/08
- Klassifikation
-
Wirtschaft
Price Level; Inflation; Deflation
Monetary Policy
Central Banks and Their Policies
Policy Objectives; Policy Designs and Consistency; Policy Coordination
- Thema
-
European Monetary Union
euro area
macroeconomic modelling
rational expectations
nominal rigidities
overlapping wage contracts
inflation persistence
monetary policy rules
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Coenen, Guenter
Wieland, Volker
- Ereignis
-
Veröffentlichung
- (wer)
-
Goethe University Frankfurt, Center for Financial Studies (CFS)
- (wo)
-
Frankfurt a. M.
- (wann)
-
2003
- Handle
- URN
-
urn:nbn:de:hebis:30-10146
- Letzte Aktualisierung
-
10.03.2025, 11:44 MEZ
Datenpartner
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Coenen, Guenter
- Wieland, Volker
- Goethe University Frankfurt, Center for Financial Studies (CFS)
Entstanden
- 2003
Ähnliche Objekte (12)
A small estimated euro area model with rational expectations and nominal rigidities
Zur Qualität der Dokumentation der Schockraumversorgung schwer Traumatisierter : ein Vergleich von primär EDV-gestützter und handschriftlicher Dokumentation
Exchange-rate policy and the zero bound on nominal interest
Exchange-rate policy and the zero bound on nominal interest rates
Leitzinserhöhung der EZB: Kein Grund zur Entwarnung
Verfahren zum Anleihekaufprogramm der EZB
Monetary Policy and Uncertainty about the Natural Unemployment Rate
Fiscal stimulus and the promise of future spending cuts: A comment
The decline in euro area inflation and the choice of policy strategy
Quantitative easing: A rationale and some evidence from Japan
Learning, endogenous indexation and disinflation in the New-Keynesian model
Monetary policy, parameter uncertainty and optimal learning
A small estimated euro area model with rational expectations and nominal rigidities
Zur Qualität der Dokumentation der Schockraumversorgung schwer Traumatisierter : ein Vergleich von primär EDV-gestützter und handschriftlicher Dokumentation
Exchange-rate policy and the zero bound on nominal interest
Exchange-rate policy and the zero bound on nominal interest rates
Leitzinserhöhung der EZB: Kein Grund zur Entwarnung
Verfahren zum Anleihekaufprogramm der EZB
Monetary Policy and Uncertainty about the Natural Unemployment Rate
Fiscal stimulus and the promise of future spending cuts: A comment
The decline in euro area inflation and the choice of policy strategy
Quantitative easing: A rationale and some evidence from Japan
Learning, endogenous indexation and disinflation in the New-Keynesian model
Monetary policy, parameter uncertainty and optimal learning
A small estimated euro area model with rational expectations and nominal rigidities
Zur Qualität der Dokumentation der Schockraumversorgung schwer Traumatisierter : ein Vergleich von primär EDV-gestützter und handschriftlicher Dokumentation
Exchange-rate policy and the zero bound on nominal interest
Exchange-rate policy and the zero bound on nominal interest rates
Leitzinserhöhung der EZB: Kein Grund zur Entwarnung
Verfahren zum Anleihekaufprogramm der EZB
Monetary Policy and Uncertainty about the Natural Unemployment Rate
Fiscal stimulus and the promise of future spending cuts: A comment
The decline in euro area inflation and the choice of policy strategy
Quantitative easing: A rationale and some evidence from Japan
Learning, endogenous indexation and disinflation in the New-Keynesian model