Multiple constraints applied into the DSGE model: The case of unconventional monetary easing in the Czech economy

Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F16%3A00090019" target="_blank" >RIV/00216224:14560/16:00090019 - isvavai.cz</a>
Result on the web
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DOI - Digital Object Identifier
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Result language
angličtina
Original language name
Multiple constraints applied into the DSGE model: The case of unconventional monetary easing in the Czech economy
Original language description
In this paper, we deal with the nonlinear constraints applied into the standard small open economy DSGE model. As a real economy example, we study a case of the zero lower bound on the interest rate and the lower bound on the foreign exchange rate. We analyze the simulated trajectories of the model variables that represent the economy during a period of low interest rates that reach the zero lower bound. The second constraint represents the usage of the foreign exchange rate as an unconventional tool for monetary easing. The tool used for our analysis is called DynareOBC and it was developed by Tom Holden. Its basic principle is based on the quadratic optimization. The toolbox is an extension of well-known toolbox Dynare and it is suitable for using under computational system Matlab. The results suggest that the foreign exchange rate may substitute the interest rate as a monetary tool when necessary.
Czech name
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Czech description
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Publication year
2016
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů

Article name in the collection
Proceedings of the International Scientific Conference QUANTITATIVE METHODS IN ECONOMICS Multiple Criteria Decision Making XVIII. Vrátna, Slovakia, 2016
ISBN
9788097232801
ISSN
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e-ISSN
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Number of pages
6
Pages from-to
356-361
Publisher name
University of Economics, Bratislava
Place of publication
Bratislava
Event location
Vrátna, Slovakia
Event date
Jan 1, 2016
Type of event by nationality
EUR - Evropská akce
UT code for WoS article
000394099300058

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