@techreport{Plasmans2007microfounded,
abstract = {In this paper we derive a microfounded macro New Keynesian model for open economies, be them large or small. We consider habit formation in consumption, sectoral linkages for tradable and non-tradable goods, capital stock investments with variable capital utilization, domestic and foreign governments, imperfect (exchange rate) pass-through in import prices and incomplete international financial markets. Sticky nominal prices and wages are modeled in Calvo and Taylor staggered ways. The model economy is composed of a continuum of infinitely-lived consumers and producers of final and intermediate goods. We provide a very general log-linearization method, from which we can easily obtain various special cases, as trend inflation or steady-state log-linearizations. Numerical simulations of the two-country sectoral model are provided for a relatively large number of structural shocks as domestic and foreign productivity shocks in final tradables and non-tradables, money demand shocks and a shock in the exchange rate. Such a model is well suited for monetary policy analysis at the international level and risk analysis.},
address = {M\"{u}nchen},
author = {Joseph Plasmans and Jorge Fornero and Tomasz Michalak},
copyright = {http://www.econstor.eu/dspace/Nutzungsbedingungen},
keywords = {E31; D21; F41; P24; 330; Ungleichgewichtstheorie; Offene Volkswirtschaft; Mehr-Sektoren-Modell; Handelbares Gut; Nicht-handelbares Gut; Vorprodukt; Mikro\"{o}konomische Fundierung; Theorie},
language = {eng},
number = {2052},
publisher = {CESifo},
title = {A microfounded sectoral model for open economies},
type = {CESifo working paper},
url = {http://hdl.handle.net/10419/26097},
year = {2007}
}
