Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/82423
Authors: 
Lindé, Jesper
Nessén, Marianne
Söderström, Ulf
Year of Publication: 
2004
Series/Report no.: 
Sveriges Riksbank Working Paper Series 167
Abstract: 
We develop a structural model of a small open economy with gradual exchange rate pass-through and endogenous inertia in inflation and output. We then estimate the model by matching the implied impulse responses with those obtained from a VAR model estimated on Swedish data. Although our model is highly stylized it captures very well the responses of output, domestic and imported inflation, the interest rate, and the real exchange rate. However, in order to account for the observed persistence in the real exchange rate and the large deviations from UIP, we need a large and volatile premium on foreign exchange.
Subjects: 
structural open-economy model
new open-economy macroeconomics
estimation
calibration
JEL: 
E52
F31
F41
Document Type: 
Working Paper

Files in This Item:
File
Size
913.99 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.