|| Mgr. Božena Bobková , Aliyev, Ilin; Štork, Zbyněk|
|ISSN / ISBN:
||Ministry of Finance Working Paper Series
||Prague, Czech Republic
||Dynamic stochastic general equilibrium model, scal policy, taxes, impulse
||D58, E62, H30, H20
||In the paper we present a New-Keynesian small open-economy dynamic stochastic general equilibrium model. It consists of four main building blocks: households, firms, government (fiscal and monetary authorities) and the foreign economy. The model is designed to suit the requirements of the Ministry of Finance of the Czech Republic on macroeconomic and fiscal policy analysis. The paper builds on previous versions of the model -- a rather general first version and extension of fiscal policy block -- and brings two important additional extensions. First, previously modelled net exports are split into two -- exports and imports. Second, the model explicitly specifies investments as a separate part of the domestic demand. Therefore we included physical capital and capital services into the model. We believe that these extensions will be useful for in-depth analysis of various macroeconomic events as well as intended fiscal policy measures including their impacts on the Czech economy.