In this paper I use a New Keynesian model with unemployment and estimate it for the Romanian economy using Bayesian techniques. I use the estimated model to derive an estimation of the Okun coefficient. I alternatively estimate the Okun coefficient using the Bayesian linear regression. The results show that the Okun coefficient is high in the Romanian economy implying that the current crisis will have a severe impact on the labour market as well as important social effects.
Blanchard, O. — Gali, J. (2006): A New Keynesian Model with Unemployment. MIT Department of Economics,
Brooks, S. P. — Gelman, A. (1998): General Methods for Monitoring Convergence of Iterative Simulations.
Journal of Computational and Graphical Statistics
, 7(4): 434–455.
Gelman A., 'General Methods for Monitoring Convergence of Iterative Simulations' (1998) 7Journal of Computational and Graphical Statistics: 434-455.
Gelman A.General Methods for Monitoring Convergence of Iterative SimulationsJournal of Computational and Graphical Statistics19987434455)| false