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Inside PESSOA -A Detailed Description of the Model

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Abstract

This article presents a detailed description of PESSOA - Portuguese Economy Structural Small Open Analytical model. PESSOA is a dynamic general equilibrium model that can be applied to any small economy integrated in a monetary union. The main theoretical reference behind its structure is Kumhof, Muir, Mursula, and Laxton (2010). The model features non-Ricardian characteristics, a multi-sectoral production structure, imperfect market competition, and a number of nominal, real, and financial rigidities. PESSOA has been calibrated to match Portuguese and euro area data and used to illustrate a number of key macroeconomic issues, ranging from the effects of structural reforms to alternative fiscal policy options.

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  • Gabriela Castro & José R. Maria & Paulo Júlio, 2013. "Inside PESSOA -A Detailed Description of the Model," Working Papers w201316, Banco de Portugal, Economics and Research Department.
    • Handle: RePEc:ptu:wpaper:w201316
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    Citations

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    Cited by:

    1. Donal Smith, 2015. "Collateral Constraints and the Interest Rate," Discussion Papers 15/22, Department of Economics, University of York.
    2. José R. Maria & Paulo Júlio, 2017. "Output in the Portuguese post-2008 period: A general equilibrium narrative," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    3. Daniel Baksa & Zsuzsa Munkacsi, 2016. "Aging, (Pension) Reforms and the Shadow Economy in Southern Europe," Bank of Lithuania Working Paper Series 32, Bank of Lithuania.
    4. José R. Maria & Paulo Júlio, 2017. "The Portuguese post-2008 period: A narrative from an estimated DSGE model," Working Papers w201715, Banco de Portugal, Economics and Research Department.
    5. Gulan, Adam, 2018. "Paradise lost? A brief history of DSGE macroeconomics," Bank of Finland Research Discussion Papers 22/2018, Bank of Finland.
    6. repec:zbw:bofrdp:2018_022 is not listed on IDEAS
    7. Gulan, Adam, 2018. "Paradise lost? A brief history of DSGE macroeconomics," Research Discussion Papers 22/2018, Bank of Finland.
    8. Daniel Baksa & Mihnea Constantinescu & Zsuzsa Munkacsi, 2016. "Aging, Informality and Public Policies in a Small Open Economy," Bank of Lithuania Discussion Paper Series 2, Bank of Lithuania.
    9. José Alves, 2018. "A DSGE Model to Evaluate the Macroeconomic Impacts of Taxation," Working Papers REM 2018/62, ISEG - Lisbon School of Economics and Management, REM, Universidade de Lisboa.
    10. Gabriela Castro & José R. Maria & Paulo Júlio & Ricardo Mourinho Félix, 2014. "Financial frictions and shock transmission: the Portuguese case," Economic Bulletin and Financial Stability Report Articles and Banco de Portugal Economic Studies, Banco de Portugal, Economics and Research Department.
    11. de Walque, Gregory & Pisani, Massimiliano & Kilponen, Juha & Thomas, Carlos & Hlédik, Tibor & Hurtado, Samuel & Hollmayr, Josef & Corbo, Vesna & Schmidt, Sebastian & Micallef, Brian & Maria, José R. &, 2015. "Comparing fiscal multipliers across models and countries in Europe," Working Paper Series 1760, European Central Bank.
    12. Castro, Gabriela & Félix, Ricardo M. & Júlio, Paulo & Maria, José R., 2015. "Unpleasant debt dynamics: Can fiscal consolidations raise debt ratios?," Journal of Macroeconomics, Elsevier, vol. 44(C), pages 276-294.
    13. Wieland, Volker & Binder, Michael & Lieberknecht, Philipp & Quintana, Jorge, 2017. "Model Uncertainty in Macroeconomics: On the Implications of Financial Frictions," CEPR Discussion Papers 12013, C.E.P.R. Discussion Papers.
    14. Noel Rapa, 2016. "MEDSEA : a small open economy DSGE model for Malta," CBM Working Papers WP/05/2016, Central Bank of Malta.
    15. Daniel Baksa & Zsuzsa Munkacsi, 2016. "A Detailed Description of OGRE, the OLG Model," Bank of Lithuania Working Paper Series 31, Bank of Lithuania.
    16. Alex Pienkowski, 2019. "A Three-Country Macroeconomic Model for Portugal," IMF Working Papers 2019/281, International Monetary Fund.
    17. Noel Rapa, 2017. "Estimates of Fiscal Multipliers using MEDSEA," CBM Working Papers WP/04/2017, Central Bank of Malta.

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