Estimated Small Open Economy Model with Frictional Unemployment

Julien Albertini (1) , Güneş Kamber (2) , Michael Kirker (2)

1 UEVE - Université d'Évry-Val-d'Essonne
2 Reserve Bank of New Zealand

This paper investigates labour market dynamics in New Zealand by estimating a structural small open economy model enriched with standard search and matching frictions in the labour market. We show that the model fits the business cycle features of key macroeconomic variables reasonably well and provides an appealing monetary transmission mechanism. We then extend our analysis to examine the driving forces behind labour market variables. Our findings suggest that the bulk of variation in labour market variables is solely explained by disturbances pertaining to the labour market

Domaines: Economies et finances

Julien Albertini, Güneş Kamber, Michael Kirker. Estimated Small Open Economy Model with Frictional Unemployment. Pacific Economic Review, 2012, 17 (2), pp. 326-353. ⟨10.1111/j.1468-0106.2012.00585.x⟩. ⟨halshs-02188600⟩