Output gap in the Czech economy: DSGE approach
Bechný Jakub ()
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Bechný Jakub: Masaryk University, Faculty of Economics and Administration, Department of Economics, Lipová 41a, 602 00 Brno, Czech Republic
Review of Economic Perspectives, 2019, vol. 19, issue 2, 137-156
This paper presents three measures of the output gap estimated by a dynamic stochastic general equilibrium model of the Czech economy. We argue that the most plausible description of the business cycle provides the output gap defined as a deviation from a flexible price level of output, which is generated solely by permanent growth shocks. Our model shows that 2006-2008 overheating of the economy and the following 2008-2009 slump can be largely attributed to development in a world economy and export and import sectors, while the 2012-2013 recession was caused mainly by a combination of adverse domestic demand and cost shocks.
Keywords: DSGE model; labour market; output gap; small open economy (search for similar items in EconPapers)
JEL-codes: C32 E32 E47 (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:vrs:reoecp:v:19:y:2019:i:2:p:137-156:n:4
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