Publication details

Labour market frictions and vacancies: small open economy DSGE model

Authors

BECHNÝ Jakub VAŠÍČEK Osvald

Year of publication 2019
Type Article in Proceedings
Conference 37th International Conference Mathematical Methods in Economics Conference Proceedings
MU Faculty or unit

Faculty of Economics and Administration

Citation
Web http://mme2019.ef.jcu.cz/files/conference_proceedings.pdf
Keywords Bayesian estimation; DSGE model; in-sample forecasts; job vacancies; labour market; predictive ability; small open economy
Description The goal of this paper is to incorporate job vacancies into a small open economy dynamic stochastic general equilibrium model with involuntary unemployment. The observed vacancies are introduced into the model by using a variant of matching function. The model is estimated by using a Bayesian approach and 16 observed variables from 2001Q1 to 2018Q4 for the Czech economy. The observed vacancies allow us to identify hiring cost shock which has a moderate impact on inflation. However, the observed vacancies do not improve the overall predictive ability of the model, since the model over-predicts the vacancies’ volatility.
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