Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/229881 
Year of Publication: 
2020
Citation: 
[ISSN:] 0972-6861 [Issue:] 4 (forthcoming) [Publisher:] IUP Publications [Place:] Hyderabad, Telangana, India [Year:] 2020 [Pages:] 47-59
Publisher: 
IUP Publications, Hyderabad, Telangana, India
Abstract: 
We augment an otherwise standard business cycle model with a richer government sector, and add a modified cash in advance (CIA) considerations. In particular, the cash in advance constraint of Cole (2020) is extended to include private investment and government consumption, and allows a proportion of total expenditure to be done using credit. This specification is then calibrated to Bulgarian data after the introduction of the currency board (1999-2018), gives a role to money in accentuating economic fluctuations. In particular, the modified CIA constraint produces a mechanism that allows the framework to reproduce better observed variability and correlations among model variables, and those characterizing the labor market in particular.
Subjects: 
business cycles
modified cash-in-advance (CIA) constraint
Bulgaria
JEL: 
E32
Document Type: 
Article
Document Version: 
Accepted Manuscript (Postprint)
Appears in Collections:

Files in This Item:
File
Size
237.61 kB





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.