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The Environmental Multi-Sector DSGE model EMuSe: A technical documentation

Author

Listed:
  • Hinterlang, Natascha
  • Martin, Anika
  • Röhe, Oke
  • Stähler, Nikolai
  • Strobel, Johannes

Abstract

Climate change and climate policy will have far-reaching economic implications, thereby also posing new challenges for macroeconomic analysis. This is partly because climate risks have an important global dimension. Moreover, climate change and climate polices are likely to affect different economic sectors to varying degrees. Hence, in order to adequately gauge the macroeconomic implications of climate risks, models with sufficient regional and sectoral differentiation are needed. Against this background, we developed the environmental multi-sector dynamic stochastic general equilibrium model EMuSe. This paper presents the main features of the benchmark closed-economy flexible-price model, an open-economy extension of the model, a variant of the model with price-setting frictions and selected applications to illustrate key transmission channels. In order to give those who are interested the opportunity to gain more experience with EMuSe, the model codes are published together with this documentation.

Suggested Citation

  • Hinterlang, Natascha & Martin, Anika & Röhe, Oke & Stähler, Nikolai & Strobel, Johannes, 2023. "The Environmental Multi-Sector DSGE model EMuSe: A technical documentation," Technical Papers 03/2023, Deutsche Bundesbank.
    • Handle: RePEc:zbw:bubtps:280900
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    File URL: https://www.econstor.eu/bitstream/10419/280900/1/Technical_documentation_EMuSe_Main.pdf
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    References listed on IDEAS

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    1. Coenen, Günter & Straub, Roland & Trabandt, Mathias, 2013. "Gauging the effects of fiscal stimulus packages in the euro area," Journal of Economic Dynamics and Control, Elsevier, vol. 37(2), pages 367-386.
    2. Fischer, Carolyn & Springborn, Michael, 2011. "Emissions targets and the real business cycle: Intensity targets versus caps or taxes," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 352-366.
    3. Stähler, Nikolai & Thomas, Carlos, 2012. "FiMod — A DSGE model for fiscal policy simulations," Economic Modelling, Elsevier, vol. 29(2), pages 239-261.
    4. Garth Heutel, 2012. "How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 244-264, April.
    5. Rebekka Christopoulou & Philip Vermeulen, 2012. "Markups in the Euro area and the US over the period 1981–2004: a comparison of 50 sectors," Empirical Economics, Springer, vol. 42(1), pages 53-77, February.
    6. Garth Heutel, 2012. "How Should Environmental Policy Respond to Business Cycles? Optimal Policy under Persistent Productivity Shocks," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 15(2), pages 244-264, April.
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    Citations

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    Cited by:

    1. Patrick Gruning & Zeynep Kantur, 2024. "Financial Intermediation and Climate Change in a Production and Investment Network Model for the Euro Area," Working Papers 2024/06, Latvijas Banka.
    2. Hinterlang, Natascha, 2024. "Different effects of carbon pricing and border adjustment in Germany and Spain," Economic Modelling, Elsevier, vol. 141(C).
    3. Hinterlang, Natascha & Jäger, Marius & Stähler, Nikolai & Strobel, Johannes, 2024. "On curbing the rise in energy prices: An examination of different mitigation approaches," Discussion Papers 09/2024, Deutsche Bundesbank.
    4. Falck, Elisabeth & Röhe, Oke & Strobel, Johannes, 2024. "Digital transformation and its impact on labour productivity: A multi-sector perspective," Discussion Papers 28/2024, Deutsche Bundesbank.

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    More about this item

    Keywords

    climate risks; DSGE; production linkages; sectoral heterogeneity;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • E6 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • H3 - Public Economics - - Fiscal Policies and Behavior of Economic Agents
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics

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