scholarly journals Financial Crises, Regulation and Growth

2008 ◽  
Vol 206 ◽  
pp. 56-65 ◽  
Author(s):  
Ray Barrell ◽  
Ian Hurst ◽  
Simon Kirby
Keyword(s):  
General Equilibrium ◽  
Financial Crises ◽  
Credit Rationing ◽  
Equity Market ◽  
Dynamic Stochastic General Equilibrium ◽  
Significant Rise ◽  
Global Model ◽  
Dynamic Stochastic ◽  
Market Valuations ◽  
The Impact

The paper discusses the effects on growth of a systemic banking crisis as a result of debt defaults. These effects will come from the impact of credit rationing on consumption and credit and from the impacts of a significant rise in the spread between lending and borrowing rates for both producers and consumers. The analysis uses the dynamic stochastic general equilibrium version of the National Institute global model. The paper also investigates the impact on output of a permanent, regulation induced, rise in margins in the financial sector, taking into account the impacts of regulation on equity market valuations.

External Shocks and Their Transmission Channels in Nigeria: A Dynamic Stochastic General Equilibrium Approach

2022 ◽  
pp. 097491012110673
Author(s):  
Titus Ayobami Ojeyinka ◽  
Dauda Olalekan Yinusa
Keyword(s):  
General Equilibrium ◽  
Open Economy ◽  
Dynamic Stochastic General Equilibrium ◽  
Policy Implications ◽  
Output Gap ◽  
External Shocks ◽  
Transmission Channels ◽  
Dynamic Stochastic ◽  
Trade And Exchange ◽  
The Impact

The study examines the sources of external shocks and investigates their transmission channels in Nigeria using the trade-weighted variables from the country’s five top trading partners. Based on the assumption of the small open economy model, the study adopts the New Keynesian Dynamic Stochastic General Equilibrium Model on quarterly data between 1981 and 2018 using the Bayesian estimation technique. Findings from the study reveal that external shocks have a temporary and short-lived effect on the Nigerian economy. In addition, the article shows that oil price, foreign output, and foreign inflation shock have positive impacts on output gap and inflation, while the impact of foreign interest rate shock on the output gap and inflation is negative and not significant. The study also reveals that external shocks collectively explain 86% and 39%of total fluctuations in the output gap and inflation, respectively. Lastly, the study finds that external shocks transmit to the Nigerian economy via different channels. The study, therefore, concludes that terms of trade and exchange rate channels are the dominant transmitters of external shocks in Nigeria. Based on the findings from the study, important policy implications are highlighted.

scholarly journals Modelling the impact of external shocks on economy of Ukraine: DSGE approach

Ekonomika ◽  
2016 ◽  
Vol 95 (1) ◽  
pp. 64-83
Author(s):  
Olena Bazhenova ◽  
Yuliya Bazhenova
Keyword(s):  
General Equilibrium ◽  
Equilibrium Model ◽  
Adjustment Costs ◽  
Dynamic Stochastic General Equilibrium ◽  
General Equilibrium Model ◽  
External Shocks ◽  
The World ◽  
Dynamic Stochastic ◽  
Positive Shock ◽  
The Impact

The paper explores the dynamic stochastic general equilibrium model to study the impact of external shocks on the economy of Ukraine. The dynamic stochastic general equilibrium model is constructed for a small open economy that includes households, firms (domestic manufacturers and importers), government, the National Bank and external sector. The model assumes the new-Keynesian approach that includes the so-called “rigidities” of prices and wages, the existence of the households’ consumption habits and investments with adjustment costs. Also, it takes into account the country’s significant dependence on mineral products imports. All goods in the economy are divided into the domestic ones (that are exported and consumed in the country), imports and mineral products. So the purpose of the model is to study the impact of external shocks on the economy of Ukraine, such as a positive shock in world output, a positive shock in the world aggregate demand, a positive shock in the world interest rate, and a positive shock in world prices.

Monetary Policy in Low-Income Countries in the Face of the Global Crisis

2018 ◽  
Author(s):  
Alfredo Baldini ◽  
Jaromir Benes ◽  
Andrew Berg ◽  
Mai C. Dao ◽  
Rafael Portillo
Keyword(s):  
Monetary Policy ◽  
General Equilibrium ◽  
Low Income ◽  
Dynamic Stochastic General Equilibrium ◽  
Policy Implications ◽  
Low Income Countries ◽  
Policy Response ◽  
Risk Appetite ◽  
Dynamic Stochastic ◽  
The Impact

The authors develop a dynamic stochastic general equilibrium (DSGE) model with a banking sector to analyse the impact of the financial crisis in developing countries and the role of the monetary policy response, with an application to Zambia. The crisis is interpreted as a combination of three related shocks: a worsening in the terms of the trade, an increase in the country’s risk premium, and a decrease in the risk appetite of local banks. Model simulations broadly match the path of the economy during this period. The model-based analysis reveals that the initial policy response contributed to the domestic impact of the crisis by further tightening financial conditions. The authors derive policy implications for central banks, and for dynamic stochastic general equilibrium modelling of monetary policy, in low-income countries.

scholarly journals Modeling Trade Tensions

2020 ◽  
Vol 20 (279) ◽  
Author(s):  
Benjamin Hunt ◽  
Susanna Mursula ◽  
Rafael Portillo ◽  
Marika Santoro
Keyword(s):  
General Equilibrium ◽  
Large Scale ◽  
Dynamic Stochastic General Equilibrium ◽  
Dsge Models ◽  
Aggregate Productivity ◽  
Computational General Equilibrium ◽  
Aggregate Production Function ◽  
Dynamic Stochastic ◽  
The Impact ◽  
Reallocation Of Resources

In this paper, we investigate the mechanisms through which import tariffs impact the macroeconomy in two large scale workhorse models used for quantitative policy analysis: a computational general equilibrium (CGE) model (Purdue University GTAP model) and a multi-country dynamic stochastic general equilibrium (DSGE) model (IMF GIMF model). The quantitative effects of an increase in tariffs reflect different mechanisms at work. Like other models in the trade literature, in GTAP higher tariffs generate a loss in terms of output arising from an inefficient reallocation of resources between sectors. In GIMF instead, as in other DSGE models, tariffs act as a disincentive to factor utilization. We show that the two models/channels can be broadly interpreted as capturing the impact of tariffs on different components of a country’s aggregate production function: aggregate productivity (GTAP) and factor supply/utilization (GIMF). We discuss ways to combine the estimates from these two models to provide a more complete assessment of the macro effects of tariffs.

Interactive effects between monetary policy and fiscal policy based on dynamic stochastic general equilibrium model

2020 ◽  
pp. 1-12
Author(s):  
Ying Xie
Keyword(s):  
Monetary Policy ◽  
Fiscal Policy ◽  
General Equilibrium ◽  
Equilibrium Model ◽  
Control Policy ◽  
Dynamic Stochastic General Equilibrium ◽  
Economic Effects ◽  
Interactive Effects ◽  
Supply Side ◽  
Dynamic Stochastic

From the beginning to the end, monetary policy has focused too much on the control of the supply side. At present, the single supply-based monetary policy is ineffective. Therefore, it is urgent to change the current single direct supply-side regulation and control policy and replace it with a non-single and indirect control policy that combines supply and demand. Based on machine learning algorithms, this paper constructs a monetary policy analysis model based on dynamic stochastic general equilibrium methods to analyze the interactive effects of monetary policy and other policies. Moreover, this paper uses the dynamic stochastic general equilibrium model to simulate and analyze the economic effects of fiscal policy. In addition, this paper compares the economic effects of monetary policy and other policies and conducts verification and analysis through actual data. The obtained results show that the model constructed in this paper achieves the expected effect.

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