A medium-scale open economy model of Australia

Kristoffer Nimark () and Jarkko Jääskelä

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We estimate an open economy dynamic stochastic general equilibrium (DSGE) model of Australia with a number of shocks, frictions and rigidities, matching a large number of observable time series. We find that both foreign and domestic shocks are important drivers of the Australian business cycle.We also find that the initial impact on inflation of an increase in demand for Australian commodities is negative, due to an improvement in the real exchange rate, though there is a persistent positive effect on inflation that dominates at longer horizons.

Keywords: monetary; policy. (search for similar items in EconPapers)
JEL-codes: C11 E40 E52 (search for similar items in EconPapers)
Date: 2008-12
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Citations: View citations in EconPapers (8)

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Working Paper: A Medium-scale Open Economy Model of Australia (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:1210

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