Palgrave Handbook of Econometrics: Applied Econometrics

872 Macroeconometric Modeling for Policy This is one equation in two endogenous variables,uwand the wedge(p−pi),soit appears tha ...

Gunnar Bårdsen and Ragnar Nymoen 873 are trying to attain a lower real wage by nominal price increases, at the same time as the ...

874 Macroeconometric Modeling for Policy which becomes a natural rate of unemployment, independent of inflation subject to dynam ...

Gunnar Bårdsen and Ragnar Nymoen 875 model that separates the internal dynamics of the domestic wage price spiral from the facto ...

876 Macroeconometric Modeling for Policy Table 17.1 The econometric model NAM The exchange rate vt=−0.042 (0.012) {( v+p∗−p ) − ...

Gunnar Bårdsen and Ragnar Nymoen 877 Table 17.1 (continued) The rate of unemployment ut=−0.078 (0.019) { ut− 1 −7.69 ( w−p ) t ...

878 Macroeconometric Modeling for Policy Table 17.1 (continued) Money market interest rate Rt=− 0.27 (0.047) [ Rt− 1 −5.6−1.2 ( ...

Gunnar Bårdsen and Ragnar Nymoen 879 The interest rate effects on the real economy are first channeled through financial markets ...

880 Macroeconometric Modeling for Policy Equation (17.47) represents the equilibrium in the market for foreign exchange in a flo ...

Gunnar Bårdsen and Ragnar Nymoen 881 of the real exchange rate. Hence, a 1% real appreciation in terms of consumer prices is ass ...

882 Macroeconometric Modeling for Policy The above steady-state properties are derived for an exogenous policy interest rate R. ...

Gunnar Bårdsen and Ragnar Nymoen 883 6 4 2 2005 2010 2015 (a) Consumer price inflation 2020 2025 2030 2035 0 –2 7 6 5 4 3 2005 2 ...

884 Macroeconometric Modeling for Policy the other sub-sections, we use dynamic simulation, the main tool of model usage, to elu ...

Gunnar Bårdsen and Ragnar Nymoen 885 gy= 2 2 + 1.7 2 gx− 0.5 2 μ gy= 1 +0.85gx−0.25μ. We can therefore write the mean-approximat ...

886 Macroeconometric Modeling for Policy implies the steady-state meanμ: ( 4 −0.85)gx= 1 −0.25μ μ= 4 −12.6gx, so the steady-stat ...

Gunnar Bårdsen and Ragnar Nymoen 887 2007 –1.2 –1.0 –0.8 –0.6 –0.4 –0.2 0.0 0.2 2008 2009 2010 2011 2012 2007 0.0 0.2 0.4 0.6 0. ...

888 Macroeconometric Modeling for Policy Hence, stabilization of inflation after a supply shock may represent a formidable chall ...

Gunnar Bårdsen and Ragnar Nymoen 889 2003 –4 –2 0 2 4 6 2004 2005 2006 (a) Consumer price inflation (b) Unemployment rate (c) Wa ...

890 Macroeconometric Modeling for Policy –1.0 2007 –0.8 –0.6 –0.4 –0.2 0.0 0.2 0.4 2008 2009 2010 2011 2012 –.4 2007 –.3 –.2 –.1 ...

Gunnar Bårdsen and Ragnar Nymoen 891 This rule defines an interest rate path corresponding to a specific policy horizonH. The re ...