The Aino 2.0 Model

Kilponen, Juha; Orjasniemi, Seppo; Ripatti, Antti; Verona, Fabio

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The Aino 2.0 Model

Bank of Finland Research Discussion Paper No. 16/2016

Posted: 14 Jun 2016 Last revised: 11 Nov 2022

See all articles by Juha Kilponen

Seppo Orjasniemi

Bank of Finland, Monetary Policy and Research Department

Fabio Verona

Bank of Finland - Research

Date Written: May 31, 2016

Abstract

This paper presents Aino 2.0 – the dynamic stochastic general equilibrium (DSGE) model currently used at the Bank of Finland for forecasting and policy analysis. The paper provides a detailed theoretical description of the model, its estimation and how it can be used to interpret the evolution of the Finnish economy between 1995 and 2014, including the rise and fall of the electronics industry, the global financial crisis, and the stagnant growth performance since the end of the financial crisis.

Keywords: DSGE model, Finnish economy, small open economy, Bayesian estimation, aggregate shocks

JEL Classification: C11, C53, E32, E37

Suggested Citation: Suggested Citation

Kilponen, Juha and Orjasniemi, Seppo and Ripatti, Antti and Ripatti, Antti and Verona, Fabio, The Aino 2.0 Model (May 31, 2016). Bank of Finland Research Discussion Paper No. 16/2016, Available at SSRN: https://ssrn.com/abstract=2795479