Project information
Developing a Small Open DSGE Model with a Financial Sector

Project Identification
1024/2014
Project Period
1/2011 - 12/2011
Investor / Pogramme / Project type
Other - National
MU Faculty or unit
Faculty of Economics and Administration
Cooperating Organization
Czech National Bank
UniCredit Bank Czech Republic, a.s.

We will develop a small open economy DSGE model for the Czech Republic with the explicit incorporation of financial sector. The model will be tailor-made with respect to Czech stylized facts. We will introduce financial intermediaries into the framework. The financial sector block will be derived according to Edwards and Vegh (1997) and Benes et al. (2009). We will estimate the real part of the model with Bayesian techniques. Suggested model will be able to capture important linkages between real and monetary variables in the Czech economy, explore the role of commercial banks within the business cycle and analyze a propagation of structural shocks.

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