47. Gap Model of the Visegrad Group (apríl 2018)

We estimate a medium-scale gap model of the Visegrad Group including core macroeconomic variables as aggregate demand, aggregate supply, interest rates, exchange rates and unemployment, further enriched by a fiscal block for Slovakia. This model takes a form of global projection model, since incorporating mutual linkages between the economies and also their most important trading partner, aggregated eurozone. Although proposed in mostly linear form and not properly derived from micro-foundations as standard dynamic stochastic general equilibrium models, combination of relatively simple structure together with plausible impulse responses makes the model suitable for policy analysis. In addition, since the trading partners of Slovakia are modelled endogenously, we can capture spillovers between the countries and their final impact on the Slovak economy. Enrichment for the fiscal block makes the model applicable also for fiscal policy purposes.