Series: IMF Working Papers
Author(s): Pau Rabanal , and Marzie Taheri Sanjani
Publisher: INTERNATIONAL MONETARY FUND
Publication Date: 14 July 2015
Keywords: Monetary Union, Output Gap, Financial Frictions, Bayesian Estimation, potential output, credit, costs, monetary policy, Model Construction and Estimation, Monetary Policy (Targets
We suggest a new approach for analyzing the role of financial variables and shocks in computing the output gap. We estimate a two-region DSGE model for the euro area, with financial frictions at the household level...