Optimal Monetary Policy in an Operational Medium‐Sized DSGE Model

Malin Adolfson, Stefan Laséen (), Jesper Lindé and Lars Svensson

Journal of Money, Credit and Banking, 2011, vol. 43, issue 7, 1287-1331

Abstract: We show how to construct optimal policy projections in Ramses, the Riksbank’s open‐economy medium‐sized dynamic stochastic general equilibrium model for forecasting and policy analysis. Bayesian estimation of the parameters of the model indicates that they are relatively invariant to alternative policy assumptions and supports our view that the model parameters may be regarded as unaffected by the monetary policy specification. We discuss how monetary policy, and in particular the choice of output gap measure, affects the transmission of shocks. Finally, we use the model to assess the recent Great Recession in the world economy and how its impact on the economic development in Sweden depends on the conduct of monetary policy. This provides an illustration on how Rames incoporates large international spillover effects.

Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://doi.org/10.1111/j.1538-4616.2011.00426.x

Related works:
Journal Article: Optimal Monetary Policy in an Operational Medium-Sized DSGE Model (2011)
Working Paper: Optimal monetary policy in an operational medium-sized DSGE model (2011)
Working Paper: Optimal Monetary Policy in an Operational Medium-Sized DSGE Model (2008)
Working Paper: Optimal Monetary Policy in an Operational Medium-Sized DSGE Model (2008)
Working Paper: Optimal Monetary Policy in an Operational Medium-Sized DSGE Model (2008)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wly:jmoncb:v:43:y:2011:i:7:p:1287-1331

Access Statistics for this article

Journal of Money, Credit and Banking is currently edited by Robert deYoung, Paul Evans, Pok-Sang Lam and Kenneth D. West

More articles in Journal of Money, Credit and Banking from Blackwell Publishing
Bibliographic data for series maintained by Wiley Content Delivery ().