Affiliation:
1. Universidade Federal do Ceará, Brazil
2. Secretaria de Planejamento e Gestão do Estado do Ceará, Brasil
Abstract
Abstract This article presents an empirical methodology for analyzing the propagation of aggregate shocks across regions. While focusing on the specific case of Brazil and Ceará, the proposed methodology can be easily adapted to examine other regions as well. We develop a dynamic model, termed SAMBA+REG, which complements the Central Bank of Brazil’s dynamic stochastic general equilibrium model (SAMBA) by incorporating regional elements. This theoretical framework allows us to explore how aggregate shocks impact a specific region. We conduct simulations using fiscal and monetary shocks and the results align with the existing literature. SAMBA+REG not only facilitates the evaluation of the effects of central government economic policies on a regional economy, but also offers insights into various strategies for state governments to respond effectively to these policies.
Subject
General Economics, Econometrics and Finance
Reference33 articles.
1. “Evaluating an estimated new Keynesian small open economy model.”;Adolfson M.;Journal of Economic Dynamics and Control,2008
2. “Bayesian analysis of dsge models.”;An S.;Econometric Reviews,2007
3. “MEMO III-A large scale multi-sector DSGE model.”;Antosiewicz Marek,2016
4. “Input vs. Output taxation-A DSGE approach to modeling resource decoupling.”;Antosiewicz Marek;Sustainability,2016
5. “Measuring the regional impact of Brazilian monetary policy: a comparison between the northeast and south regions.”;Araújo E.;Economic Magazine of the Northeast,2004