Adaptive expectations NK Model


#1

I currently try to implement the hybrid adaptive/rational expectations NK model from Gertler (2017) into Dynare: https://www.nber.org/papers/w23707.pdf

I have problems to produce appropriate impulse responses. I have attached my code. Can anyone see what is wrong with it? Dynare fails to solve the perfect foresight model but still produces plots. And the impulse responses are weird, I have implemented a shock to the natural interest rate of -0.025, but the impulse response for the natural interest rate only shows a decrease of -0.01 in the first period.

Thank you for your time!

adaptive_nk_fg1.mod (1.4 KB)


#2

If I see it correctly, you have a ZLB model. That requires a particular kind of solver. Please see
https://github.com/JohannesPfeifer/DSGE_mod/blob/master/Gali_2015/Gali_2015_chapter_5_discretion_ZLB.mod