Publication details
Analysis of interactions between Czech and Slovak economy
| Authors | |
|---|---|
| Year of publication | 2010 |
| Type | Article in Proceedings |
| Conference | Mathematical Methods in Economics 2010 |
| MU Faculty or unit | |
| Citation | |
| Field | Economy |
| Keywords | interactions; Czech economy; nominal rigidity; Slovak economy; two-country model |
| Description | The paper deals with behaviour of Czech and Slovak economy. For this purpose we have developed a two-country model with an exogenous foreign sector following the New Open Economy Macroeconomics (NOEM) paradigm. The main features of the NOEM are nominal rigidities and market imperfections which provide influential role for monetary policy. The model assumes optimizing households and monopolistically competitive firms, monetary policy conducted according to a Taylor rule, complete international financial market and competitive labour market. The sticky price setting of producers presents nominal rigidities in the model. The need for exogenous foreign sector is given by the membership of both countries in the EU. This paper presents the results from Bayesian estimation (which is incorporated in Dynare toolbox for Matlab). Specifically, we offer estimated values of structural parameters and impulse response functions. Both are used to assess the influence of one economy to another. |