An Estimated Dynamic Stochastic General Equilibrium Model for the Romanian Economy, Considering Nominal and Real Rigidities

AbstractThis paper is meant to render the estimation, for Romania, of an open economy DSGE model, grounded on the new Keynesian thinking, that is, considering monopolistic competition and nominal and real rigidities. The analysis implies the calibration of certain parameters, based on accepted literature in the matter and on pertinent information for the related economy, on one hand, and the estimation of the remainder of parameters, by resorting to Bayes theorem, on the other hand. Once the posterior probabilities are determined, the results interpretation and relevance is discussed from an economic perspective