Dear all,
Hello, everyone. I’m a beginner of Dynare and trying to expand someone’e code of Gerali et al (2010) for my thesis.
In the code, I’m so wondering why the output is replaced by the variable, ‘Y1’.
Someone said the variable is intermediate output. But I don’t really understand the reason of the use.
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Does the one ensure that ‘Y1’ reflects the whole market clearing condition? The condition includes all management cost and adjustment costs.
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Why does the central bank’s equation use the Y1 as output? How can it be consistent with the RETAILERS’s equation that use output as production function?
Thank you so much in advance.
Without wax,
Sangun Shin.
P.S) I will deal with the parameter dependence.
Gerali_estimation.mod (25.3 KB)