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A Semi-Structural General Equilibrium Analysis of Moldova's Monetary Policy Transmission Mechanism

Ion Partachi () and Simion Mija
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Ion Partachi: Academy of Economic Studies, Chisinau, Republic of Moldova

Economic Research Guardian, 2015, vol. 5, issue 1, 34-47

Abstract: The aim of the research is to describe a macro-econometric model for the monetary policy transmission channels, in order to assess the particularities of low income countries, as Republic of Moldova. The general equilibrium model is kept simple, capturing main transmission channels, while the empirical results are generated using Bayesian estimations. The variables are treated as exogenous and the natural logarithm of first-order differences of seasonally adjusted series is used. Data with quarterly periodicity cover the period 1st quarter of 2002 - 2nd quarter of 2014. The objective of the paper is to quantify the effects of the demand and exchange rate shocks to inflation and to assess the properties of the model, by simulating responses to standard shocks. We discover that exchange rate shocks to inflation have a higher magnitude that demands shocks In Moldova, while demand shocks close faster.

Keywords: General equilibrium model; Open economy; Calibration; Monetary policy; Moldova (search for similar items in EconPapers)
JEL-codes: E17 E52 (search for similar items in EconPapers)
Date: 2015
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