Publication details
Impact of Labour and Growth Shocks in Small Open Economy: DSGE Approach
| Authors | |
|---|---|
| Year of publication | 2020 |
| Type | Article in Proceedings |
| Conference | 38th International Conferenceon Mathematical Methods in Economics (MME 2020) Conference Proceedings |
| MU Faculty or unit | |
| Citation | |
| Web | https://mme2020.mendelu.cz/wcd/w-rek-mme/mme2020_conference_proceedings_final.pdf |
| Keywords | Bayesian estimation; DSGE model; labour market; small open economy |
| Description | This paper aims to identify the impacts of the labour market shocksfor economic growth, and the impact of the growth shocks for the labour marketvariables. We use a small open economy dynamic stochastic general equilibrium model with real wage rigidity and involuntary unemployment. The model is estimated by using a Bayesian approach and 16 observed variables from 2001Q1 to2019Q4 for the Czech economy. The main results are as follows: (i) The labour supply shocks contributed to the economic growth and induced disinflationary pressure during 2010–2017 period, but are the barrier of growth from 2018 on-wards; (ii) Productivity and domestic cost shocks are the dominant determinants of real wage growth; (iii) The effect of the domestic demand shock on the unemployment is twice as large as the foreign demand shock. |
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