Estimated Small Open Economy Model with Frictional Unemployment

28 Pages Posted: 19 May 2012

See all articles by Julien Albertini

Julien Albertini

University of Lyon 2

Güneş Kamber

Bank for International Settlements (BIS) - Monetary and Economic Department

Michael Kirker

affiliation not provided to SSRN

Date Written: May 2012

Abstract

This paper investigates labour market dynamics in New Zealand by estimating a structural small open economy model enriched with standard search and matching frictions in the labour market. We show that the model fits the business cycle features of key macroeconomic variables reasonably well and provides an appealing monetary transmission mechanism. We then extend our analysis to examine the driving forces behind labour market variables. Our findings suggest that the bulk of variation in labour market variables is solely explained by disturbances pertaining to the labour market.

Suggested Citation

Albertini, Julien and Kamber, Gunes and Kirker, Michael, Estimated Small Open Economy Model with Frictional Unemployment (May 2012). Pacific Economic Review, Vol. 17, Issue 2, pp. 326-353, 2012. Available at SSRN: https://ssrn.com/abstract=2062043 or http://dx.doi.org/10.1111/j.1468-0106.2012.00585.x

Julien Albertini (Contact Author)

University of Lyon 2 ( email )

Gunes Kamber

Bank for International Settlements (BIS) - Monetary and Economic Department ( email )

Centralbahnplatz 2
CH-4002 Basel
Switzerland

Michael Kirker

affiliation not provided to SSRN

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