for the euro area. The model incorporates various other features such as habit formation, costs of adjustment in capital … in the euro area. Using the estimated model, the paper also analyses the output (real interest rate) gap, defined as the …

Smets and Wouters (2003) find that at short- and medium-term horizons stochastic variations in the goods market mark …-up are the most important source of inflation variability in the euro area. This article shows that an empirically plausible …

developments in the euro area since the start of EMU. …

Smets and Wouters () find that at short- and medium-term horizons stochastic variations in the goods market mark-up are … the most important source of inflation variability in the euro area. This article shows that an empirically plausible …

developments in the euro area since the start of EMU …

developments in the euro area since the start of EMU …