Labor Market Frictions in the Estimated DSGE Model for Armenia

Haykaz Igityan ()
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Haykaz Igityan: Monetary Policy Department, Central Bank of Armenia

No 5, Working Papers from Central Bank of Armenia

Abstract: This paper develops DSGE model for Armenia allowing the household to supply labor both to formal and informal sectors. The paper discusses costs per hire, which is equivalent to matching function approach adopted by search models. The model is estimated by Bayesian method using 9 Armenian time series and 9 structural shocks. The estimated model reproduces dynamics of data quite well. Estimated structural shocks are supported by stylized facts and historical events. The fully micro-founded model with labor market frictions allows getting a deeper insight into the Armenian labor market developments.

Keywords: New Keynesian; unemployment; informal labor market; labor market tightness; hiring costs; Bayesian estimation (search for similar items in EconPapers)
JEL-codes: C11 E12 E24 E26 J32 J46 (search for similar items in EconPapers)
Pages: 101 pages
Date: 2016-04
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Published in CBA Working Paper Series, April 2016

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https://www.cba.am/EN/panalyticalmaterialsresearches/Analytical_31.01.2017.pdf First version, 2016 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:ara:wpaper:005

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