MEDEA: A DSGE Model for the Spanish Economy

Pablo Burriel (), Jesus Fernandez-Villaverde () and Juan F Rubio-Ramirez ()

PIER Working Paper Archive from Penn Institute for Economic Research, Department of Economics, University of Pennsylvania

Abstract: In this paper, we provide a brief introduction to a new macroeconometric model of the Spanish economy named MEDEA (Modelo de Equilibrio Dinámico de la Economía EspañolA). MEDEA is a dynamic stochastic general equilibrium (DSGE) model that aims to describe the main features of the Spanish economy for policy analysis, counterfactual exercises, and forecasting. MEDEA is built in the tradition of New Keynesian models with real and nominal rigidities, but it also incorporates aspects such as a small open economy framework, an outside monetary authority such as the ECB, and population growth, factors that are important in accounting for aggregate fluctuations in Spain. The model is estimated with Bayesian techniques and data from the last two decades. Beyond describing the properties of the model, we perform different exercises to illustrate the potential of MEDEA, including historical decompositions, long-run and short-run simulations, and counterfactual experiments.

Keywords: DSGE Models; Likelihood Estimation; Bayesian Methods (search for similar items in EconPapers)
JEL-codes: C11 C13 E30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cba, nep-cmp, nep-dge and nep-mac
Date: 2009-05-04

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Related works:
Working Paper: MEDEA: A DSGE Model for the Spanish Economy (2009)
Working Paper: MEDEA: A DSGE Model for the Spanish Economy (2009)
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Persistent link: http://EconPapers.repec.org/RePEc:pen:papers:09-017

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