MELEZE: A DSGE model for France within the Euro Area

Benoît Campagne () and Aurélien Poissonnier

Documents de Travail de l'Insee - INSEE Working Papers from Institut National de la Statistique et des Etudes Economiques

Abstract: MELEZE, standing for Modèle économique linéarisé déquilibre en zone euro (linearised economic model of equilibrium in the euro area), is a new Keynesian DSGE model with the following characteristics: France and the rest of the Euro area form a monetary union; they are populated by infinitely lived households, of which a constant fraction is non Ricardian, consuming all of their current income; firms operate in monopolistic competition on the goods market, and so do workers on the labour market indistinctly of their financial constraints; prices and wages are sticky; consumption and investment goods can be freely exported/imported, whereas workers and installed capital cannot. The present paper presents the resolution and the calibration of the model as well as its full linearisation. In particular, we characterize the unique steady state in levels for the real variables and explicit the induced constraints on the parametrisation. In a second part, we present the behaviour of our model with respect to standard transitory shocks.

Keywords: DSGE model; monetary union (search for similar items in EconPapers)
JEL-codes: E10 F45 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (5)

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