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An Estimated DSGE Model for Monetary Policy Analysis in Low-Income Countries, Shanaka Peiris, Magnus Saxegaard

Abstract
This paper evaluates monetary policy-tradeoffs in low-income countries using a dynamic stochastic general equilibrium (DSGE) model estimated on data for Mozambique taking into account the sources of major exogenous shocks, and level of financial development. To our knowledge this is a first attempt at estimating a DSGE model for Sub-Saharan Africa excluding South Africa. Our simulations suggests that a exchange rate peg is significantly less successful than inflation targeting at stabilizing the real economy due to higher interest rate volatility, as in the literature for industrial countries and emerging markets
Table Of Contents
Contents; I. Introduction; II. DSGE Model; A. Structure of the Model; B. Household Behavior; C. Final Goods Production; D. Intermediate Goods Production; E. Price-Setting by Intermediate Goods Producers; F. Financial Intermediary; G. The Public Sector; H. Fiscal and Monetary Policy Rules; I. Market Clearing and Aggregation; J. Stochastic Shocks; III. Empirical Findings; IV. Monetary Policy Rules in a Shock-Prone Economy; V. Conclusions; References; Appendices; I: Calibration; II: Estimation Results; III: Prior and Posterior Distributions; IV: Actual and One-Step Ahead Forecasts
Language
eng
Literary Form
non fiction
Note
Description based upon print version of record
Physical Description
1 online resource (33 p.)
Specific Material Designation
remote
Form Of Item
online
Isbn
9781462388103

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