A Medium-scale Open Economy Model of Australia

Jarkko Jääskelä and Kristoffer Nimark ()
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Jarkko Jääskelä: Reserve Bank of Australia

RBA Research Discussion Papers from Reserve Bank of Australia

Abstract: We estimate an open economy dynamic stochastic general equilibrium (DSGE) model of Australia with a number of shocks, frictions and rigidities, matching a large number of observable time series. We find that both foreign and domestic shocks are important drivers of the Australian business cycle. We also find that the initial impact on inflation of an increase in demand for Australian commodities is negative, due to an improvement in the real exchange rate, though there is a persistent positive effect on inflation that dominates at longer horizons.

Keywords: monetary; policy (search for similar items in EconPapers)
JEL-codes: C11 E40 E52 (search for similar items in EconPapers)
Date: 2008-12
New Economics Papers: this item is included in nep-cba, nep-dge, nep-mac and nep-opm
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Citations: View citations in EconPapers (9)

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Working Paper: A medium-scale open economy model of Australia (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:rba:rbardp:rdp2008-07

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