DSGE; small open economy; Bayesian estimation; rigidities
In this paper, I follow the model structure and the steps taken by the paper by Fenz et al. (2012). Model for small open economy is constructed. 14 shocks and many rigidities are included in it. Then, the main aim of the paper is to understand how model variables react to different shocks and which shocks in fact affect model variables more in the short-run and in the long-run.