Estimated DSGE Model for Monetary and Fiscal Polic Coordination Analysis – The Case of Serbia

Tamara Bašić Vasiljev ()
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Tamara Bašić Vasiljev: Economist, Roubini Global Economics, London, UK

Journal of Central Banking Theory and Practice, 2018, vol. 7, issue 1, 145-173

Abstract: We present a new-Keynesian model for small open economy, with price rigidities stemming from a Calvo pricing scheme (1983), monopolistic banking system, financial dollarization of the economy and monetary and fiscal policy governed by rules. We estimate the model on Serbian data and propose various model extensions that could be used for monetary and fiscal policy analysis. We consider 6 combinations of monetary and fiscal policy regimes, inflation targeting and currency peg on one hand, and discretionary cyclically neutral fiscal policy and fiscal rules, on the other. The model with inflation targeting and discretionary fiscal policy fits the data best.

Keywords: monetary policy; fiscal policy; DSGE model; coordination; Bayesian estimation. (search for similar items in EconPapers)
JEL-codes: C15 E10 E12 E17 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:cbk:journl:v:7:y:2018:i:1:p:145-173

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