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This paper estimates a dynamic stochastic general equilibrium (DSGE) model for the European Monetary Union by using Bayesian techniques. A salient feature of the model is an extension of the typically postulated quadratic cost structure for the monopolistic choice of price variables. As shown in...
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Union; The Bargaining Solution; Bargaining as a Theory of the Long Run; The Econometric Model; Appendix; A Macroeconometric …
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