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The interaction between monetary and fiscal policies in Turkey: An estimated New Keynesian DSGE model

Cem Çebi ()

Economic Modelling, 2012, vol. 29, issue 4, 1258-1267

Abstract: This paper estimates a New Keynesian open economy DSGE model for Turkey by using Bayesian estimation technique for the period of 2002:q1–2009:q3. It studies fiscal and monetary policy interactions and their role in stabilisation of the economy using a small-scale model following the methodology outlined in Lubik and Schorfheide (2007). The general features of the model can be summarised as follows: Calvo style nominal price rigidities, perfect exchange rate pass-through, complete international asset markets, rule of thumb price setters and distortionary taxation.

Keywords: Monetary and fiscal policies; Macroeconomic stabilisation; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: E52 E61 E63 (search for similar items in EconPapers)
Date: 2012
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:4:p:1258-1267

DOI: 10.1016/j.econmod.2012.04.014

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