Inside PESSOA -A Detailed Description of the Model
Gabriela Castro (),
José Maria (),
Paulo Júlio (),
Ricardo Félix () and
Vanda Almeida ()
Working Papers from Banco de Portugal, Economics and Research Department
This article presents a detailed description of PESSOA - Portuguese Economy Structural Small Open Analytical model. PESSOA is a dynamic general equilibrium model that can be applied to any small economy integrated in a monetary union. The main theoretical reference behind its structure is Kumhof, Muir, Mursula, and Laxton (2010). The model features non-Ricardian characteristics, a multi-sectoral production structure, imperfect market competition, and a number of nominal, real, and financial rigidities. PESSOA has been calibrated to match Portuguese and euro area data and used to illustrate a number of key macroeconomic issues, ranging from the effects of structural reforms to alternative fiscal policy options.
JEL-codes: E62 F41 H62 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-cmp and nep-eec
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