Extending the NAWM for the import content of exports

Coenen, Gunter and Vetlov, Igor (2009): Extending the NAWM for the import content of exports.

Abstract

In this document, we set out the details for extending the New Area-Wide Model (NAWM; cf. Christoffel, Coenen and Warne, 2008) with a non-zero import content of exports. We first describe the technology used by the intermediate-good firms for producing their differentiated outputs sold abroad. We then formulate the modified market clearing conditions as well as the aggregate resource constraint for the extended model. Finally, we outline the computation of the modified steady state.

• Item Type: MPRA Paper
• Language: English
• Keywords: DSGE modelling, open-economy macroeconomics, forecasting, policy analysis, euro area
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E32 - Business Fluctuations ; Cycles; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E37 - Forecasting and Simulation: Models and Applications; E - Macroeconomics and Monetary Economics > E4 - Money and Interest Rates > E47 - Forecasting and Simulation: Models and Applications

References

Christoffel, Kai, Günter Coenen, and Anders Warne, 2008, The New Area-Wide Model of the Euro Area: A Micro-Founded Open-Economy Model for Forecasting and Policy Analysis, European Central Bank Working Paper No. 944.