Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/130386
Authors: 
Hristov, Nikolay
Year of Publication: 
2016
Series/Report no.: 
Ifo Working Paper 210
Abstract: 
This paper estimates a medium-scale open economy DSGE model for Germany and therest of the Euro Area (REA). The parameter estimates indicate that there is a modestdegree of structural heterogeneity between Germany and the rest of the Euro Area. Inparticular, (i) the private sector in Germany tends to adjust its capital stock faster thanits counterpart in the REA, (ii) the innovations to government spending as well as thoseto the degree of competition in goods markets are relatively more volatile in Germanyand (iii) nominal prices and wages appear to be slightly more flexible in Germany thanin the REA. A comparison based on marginal likelihoods shows that the DSGE modelfits the observable macroeconomic time series similarly well as unrestricted BayesianVARs (BVARs) estimated on the same data set.
Subjects: 
DSGE model
German economy
monetary union
Bayesian estimation.
JEL: 
C11
C51
E17
Document Type: 
Working Paper

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