An Open-Economy DSGE Model of the Euro Area

80 Pages Posted: 18 Dec 2006

See all articles by Pascal Jacquinot

Pascal Jacquinot

European Central Bank (ECB)

Ricardo Mestre

European Central Bank (ECB)

Martin Spitzer

European Central Bank (ECB)

Date Written: July 2006

Abstract

An open-economy DSGE model for the euro area is presented, with the explicit aim to model the price pass-through for foreign shocks, with a special emphasis on oil price shocks. The model includes a multiple-sector supply side with explicit use of energy as a factor of production and the presence of distribution costs. The model is augmented with an almost symmetric rest of the world and a simpli…ed set of equations for energy-exporting countries. Calibration of the model is done suing extensive use of data, including input-output tables. The conclusion is that a modelling of imports as input factors, not only …nal-demand goods, may help mapping the structure into the data and provide a more robust analysis of the pass-through.

Keywords: Energy sector, Oil shocks, Oil prices, DSGE models, Input-Output modelling

JEL Classification: E31, E32, F41, Q43

Suggested Citation

Jacquinot, Pascal and Mestre, Ricardo and Spitzer, Martin, An Open-Economy DSGE Model of the Euro Area (July 2006). Available at SSRN: https://ssrn.com/abstract=951504 or http://dx.doi.org/10.2139/ssrn.951504

Pascal Jacquinot

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

Ricardo Mestre (Contact Author)

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany
0049 69 13440 (Phone)
0049 69 1344 6000 (Fax)

Martin Spitzer

European Central Bank (ECB) ( email )

Sonnemannstrasse 22
Frankfurt am Main, 60314
Germany

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