Smets-Wouters '03 model revisited - an implementation in gEcon

Grzegorz Klima, Karol Podemski, Kaja Retkiewicz-Wijtiwiak and Anna E. Sowińska

MPRA Paper from University Library of Munich, Germany

Abstract: This paper presents an implementation of the well-known Smets-Wouters 2003 model for Euro Area using the gEcon package - what we call the ``third generation'' DSGE modelling toolbox. Our exercise serves three goals. First, we show how gEcon can be used to implement an important - from both applications and historical perspective - model. Second, through rigorous exposition enforced by the gEcon’s block-agent paradigm we analyse all the Smets-Wouters model’s building blocks. Last, but not least, the implementation presented here serves as a natural starting point for important from applications point of view extensions, like opening the economy, introducing non-lump-sum taxes, or adding sectors to the model economy. Full model implementation is attached.

Keywords: DSGE; monetary policy; staggered prices; staggered wages (search for similar items in EconPapers)
JEL-codes: C88 E3 E4 (search for similar items in EconPapers)
Date: 2015-02-28
New Economics Papers: this item is included in nep-cmp, nep-dge, nep-eec and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:64440

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