THE IMPACT OF MONETARY POLICY ON REAL ESTATE MARKET DURING COVID-19 CRISIS USING A DSGE MODEL OF SMALL OPEN ECONOMY

Result code in IS VaVaI

<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F00216224%3A14560%2F21%3A00123624" target="_blank" >RIV/00216224:14560/21:00123624 - 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

THE IMPACT OF MONETARY POLICY ON REAL ESTATE MARKET DURING COVID-19 CRISIS USING A DSGE MODEL OF SMALL OPEN ECONOMY

Original language description

Using a new Keynesian small open economy dynamic stochastic general equilibrium model (NK SOE DSGE) with the housing sector, this paper evaluates the impact of housing collateral and changes in openness of economy on the business cycle in the Czech economy. We devote special attention to the setting of the loan to value (LTV) ratio, which we believe plays an important role as a regulator of the monetary transmission mechanism. Moreover, we try to simulate the effects of a reduction in the openness of the economy in the context of an incoming pandemic crisis. The impacts alternative LTV level and openness level setting are quantified by simulating the responses of monetary shock on key macroeconomic variables. Our simulations are based on an estimated DSGE model. Our approach allows a better understanding of the response of the real economy to monetary tightening mitigated by different levels of LTV, and allows a comparison of how these effects change in an environment of altered economic openness. Our results show that higher loan to value ratios strengthen the effect of the monetary transmission mechanism to consumption and output. In contrast, changes in the openness of the economy showed no significant changes in the dynamics of monetary transmission to real variables.

Czech name

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Czech description

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Type

D - Article in proceedings

CEP classification

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OECD FORD branch

50201 - Economic Theory

Project

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Continuities

S - Specificky vyzkum na vysokych skolach

Publication year

2021

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 ECONOMIC AND SOCIAL POLICY

ISBN

9788087291290

ISSN

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e-ISSN

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Number of pages

13

Pages from-to

439-451

Publisher name

Vysoká škola PRIGO

Place of publication

Ostrava

Event location

Ostrava

Event date

Jan 1, 2021

Type of event by nationality

CST - Celostátní akce

UT code for WoS article

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