Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/271184 
Year of Publication: 
2023
Series/Report no.: 
BoF Economics Review No. 1/2023
Publisher: 
Bank of Finland, Helsinki
Abstract: 
In this paper we analyze features of the recent business cycle with a New Keynesian small open economy DSGE model with labour market frictions and wage rigidity. The model complements the existing analytical tools of the Bank of Finland by enabling detailed analysis of labour markets in a DSGE framework. We illustrate the properties of the model by presenting how recent shocks explain in flation and economic recovery in the euro area and Finland, with a specifi c emphasis on factors that are critical to explaining current labour market tightness.
Subjects: 
DGSE model
labour market frictions
wage rigidity
JEL: 
E24
E32
E37
F41
Persistent Identifier of the first edition: 
Document Type: 
Research Report

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