LED: An estimated DSGE model of the Luxembourg economy for policy analysis

Alban Moura

No 147, BCL working papers from Central Bank of Luxembourg

Abstract: This paper outlines a new estimated dynamic stochastic general equilibrium (DSGE) model of the Luxembourg economy named LED, for Luxembourg Estimated DSGE. The paper provides a thorough discussion of the model structure, explains how LED is solved and estimated, and shows how it can be used to study important properties of the Luxembourg economy. The empirical results are encouraging: parameter estimates take reasonable values, the model fits the data well, and its implications regarding the determinants of economic growth and cyclical fluctuations in Luxembourg are plausible.

Keywords: DSGE models; open-economy macroeconomics; Bayesian inference; policy analysis; Luxembourg. (search for similar items in EconPapers)
JEL-codes: C11 C32 E32 E37 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2020-08
New Economics Papers: this item is included in nep-dge and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:bcl:bclwop:bclwp147

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