Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/210818
Authors: 
Year of Publication: 
2016
Series/Report no.: 
CBM Working Papers No. WP/05/2016
Publisher: 
Central Bank of Malta, Valletta
Abstract: 
This paper describes MEDSEA, a compact small open economy DSGE model of the Maltese economy. The model is similar in nature to other small open economy models, thus containing a number of nominal and real frictions allowing the model to replicate the sluggish reaction of economic variables documented in empirical research. Moreover, MEDSEA contains key modifications designed to account for Malta's specific characteristics. The model distinguishes between a tradable and non-tradable sector reflecting the different nature of exports when compared to other production meant for domestic use. Furthermore, the model features distribution costs in the export sector allowing for a wedge to exist between wholesale and retail export prices.
JEL: 
E12
E30
E50
Document Type: 
Working Paper

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