Money in a New-Keynesian model estimated with German data

Thomas Werner, Giovanni Lombardo and Jana Kremer

No 2003,15, Discussion Paper Series 1: Economic Studies from Deutsche Bundesbank

Abstract: In this paper we estimate a simple New-Keynesian DSGE model with German data for the sample period 1970:q1 to 1998:q4. Contrary to a number of recent similar papers estimated with US and euro-area data, we find that real money balances contribute significantly to the determination of inflation and of the dynamics of output. We estimate our model using a maximum likelihood technique under a full set of structural shocks. We do not rule out indeterminate solutions a priori. Under multiple stable paths we close the model using the minimum-state-variable solution.

Keywords: Maximum-Likelihood; DSGE; MSV solution; New-Keynesian model; Germany (search for similar items in EconPapers)
JEL-codes: E31 E32 E52 (search for similar items in EconPapers)
Date: 2003
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Citations: View citations in EconPapers (23)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:bubdp1:4212

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