This paper develops a DSGE model for an open economy and estimates it on euro area data using Bayesian estimation techniques. The model features nominal and real frictions, as well as financial frictions in the form of liquidity constrained households. The model incorporates active monetary and...

This paper revisits the issue of business cycle synchronisation in the euro area looking back on more than eight years of EMU experience. The dispersion of output gaps across Member States has reached historically low levels since around 2002. Yet, this observation seems to reflect a general...

Everywhere in the industrialized world, population aging is putting social security systems under financial strain. As a result, social security systems are being reformed in many countries. In particular, various countries move from pure pay-as-you-go (PAYG) systems to pension systems that...