In this seminar Gan-Ochir Doojav will provide an overview of his recent paper, ‘News shocks and unemployment in an estimated small open economy DSGE model’. This paper assesses the importance of news shocks as sources of labour market and macroeconomic fluctuations. To end this, the presented paper augments a standard small open economy DSGE model (e.g., Justiniano and Preston 2010) to include the theory of unemployment proposed by Galí (2011) and endogenous preference shifter, similar to that used by Galí et al. (2011). The model is estimated using Bayesian methods with data for Australia and the United States (US), and driven by both unanticipated and news (anticipated) shocks. The empirical analysis shows that the estimated model is able to qualitatively replicate the existing VAR evidence on news driven business cycles (e.g., Kosaka 2013 and Kamber et al. 2014), and the presence of news shocks has the potential to improve the model fit. Gan-Ochir concludes that news shocks are main drivers of Australian business cycle fluctuations in the inflation-targeting period.

Gan-Ochir Doojav is a PhD candidate at Crawford school of public policy. His research interests are macroeconomics and monetary policy with a focus on macroeconomic modeling for forecasting and policy analysis. He also holds a Master degree in International and Development Economics from Crawford school.

The CAMA Macroeconomics Brown Bag Seminars offer CAMA speakers, in particular PhD students, an opportunity to present their work in progress in front of their peers, and reputable visitors to showcase their work.