Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/208234
Authors: 
Coenen, Günter
Karadi, Peter
Schmidt, Sebastian
Warne, Anders
Year of Publication: 
2018
Series/Report no.: 
ECB Working Paper 2200
Abstract: 
This paper provides a detailed description of an extended version of the ECB's New Area-Wide Model (NAWM) of the euro area (cf. Christoffel, Coenen, and Warne 2008). The extended model - called NAWM II - incorporates a rich financial sector with the threefold aim of (i) accounting for a genuine role of financial frictions in the propagation of economic shocks and policies and for the presence of shocks originating in the financial sector itself, (ii) capturing the prominent role of bank lending rates and the gradual interest-rate pass-through in the transmission of monetary policy in the euro area, and (iii) providing a structural framework useable for assessing the macroeconomic impact of the ECB's large-scale asset purchases conducted in recent years. In addition, NAWM II includes a number of other extensions of the original model reflecting its practical uses in the policy process over the past ten years.
Subjects: 
DSGE modelling
Bayesian inference
financial frictions
forecasting
policy analysis
euro area
JEL: 
C11
C52
E30
E37
E58
Persistent Identifier of the first edition: 
ISBN: 
978-92-899-3305-6
Document Type: 
Working Paper

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