Vasilev, Aleksandar (2022) A business cycle model with money-in-utility (MIU) and government sector: the case of Bulgaria (1999–2020). Journal of Economic and Administrative Sciences . ISSN 1026-4116
Full content URL: https://doi.org/10.1108/JEAS-02-2022-0029
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MIU_model_Bulgaria_str_abstract_accepted2022.pdf - Whole Document Available under License Creative Commons Attribution-NonCommercial 4.0 International. 263kB |
| Item Type: | Article |
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| Item Status: | Live Archive |
Abstract
Purpose – The author augments an otherwise standard business cycle model with a richer government sector
and adds money-in-utility (MIU) considerations to study economic fluctuations.
Design/methodology/approach – More specifically, real money balances enter in a non-separable way with
consumption and leisure. This specification is then calibrated to Bulgarian data after the introduction of the
currency board (1999–2020) gives a role to money in accentuating economic fluctuations.
Findings – This novel mechanism allows the framework to reproduce – better than the real business cycle
(RBC) model – the observed variability and correlations among model variables, and those characterizing the
labor market in particular. In addition, money is non-neutral and affects aggregate economic activity.
Originality/value – This is the first micro-founded monetary-DSGE (dynamic stochastic general equilibrium)
model on Bulgaria trying to explain the role of money for economic fluctuations.
| Keywords: | Business cycles, Money-in-utility (MIU) considerations, Bulgaria |
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| Subjects: | L Social studies > L130 Macroeconomics |
| Divisions: | Lincoln International Business School |
| ID Code: | 48989 |
| Deposited On: | 20 Apr 2022 15:22 |
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