Informace o projektu
Developing a Small Open DSGE Model with a Financial Sector

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.