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MEDSEA : a small open economy DSGE model for Malta

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  • Noel Rapa

    (Central Bank of Malta)

Abstract

This paper describes MEDSEA, a compact small open economy DSGE model of the Maltese economy. The model is similar in nature to other small open economy models, thus containing a number of nominal and real frictions allowing the model to replicate the sluggish reaction of economic variables documented in empirical research. Moreover, MEDSEA contains key modifications designed to account for Malta’s specific characteristics. The model distinguishes between a tradable and non-tradable sector reflecting the different nature of exports when compared to other production meant for domestic use. Furthermore, the model features distribution costs in the export sector allowing for a wedge to exist between wholesale and retail export prices.

Suggested Citation

  • Noel Rapa, 2016. "MEDSEA : a small open economy DSGE model for Malta," CBM Working Papers WP/05/2016, Central Bank of Malta.
    • Handle: RePEc:mlt:wpaper:0516
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    File URL: https://www.centralbankmalta.org/file.aspx?f=41487
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    References listed on IDEAS

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    Cited by:

    1. Noel Rapa, 2017. "Estimates of Fiscal Multipliers using MEDSEA," CBM Working Papers WP/04/2017, Central Bank of Malta.
    2. Noel Rapa, "undated". "The Macroeconomic Effects of Efficiency Gains in Electricity Production in Malta," CBM Policy Papers PP/05/2017, Central Bank of Malta.
    3. William Gatt & Noel Rapa & Luca Brugnolini, 2020. "MEDSEA-FIN A DSGE model of the Maltese economy with housing and financial frictions," CBM Working Papers WP/04/2020, Central Bank of Malta.
    4. Darracq Pariès, Matthieu & Notarpietro, Alessandro & Kilponen, Juha & Papadopoulou, Niki & Zimic, Srečko & Aldama, Pierre & Langenus, Geert & Alvarez, Luis Julian & Lemoine, Matthieu & Angelini, Elena, 2021. "Review of macroeconomic modelling in the Eurosystem: current practices and scope for improvement," Occasional Paper Series 267, European Central Bank.
    5. Noel Rapa, 2020. "A Sectoral Model Extension to STREAM," CBM Working Papers WP/08/2020, Central Bank of Malta.

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    More about this item

    JEL classification:

    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • E30 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - General (includes Measurement and Data)
    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General

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