Calibrating DSGE for Mexican Economy


We are trying to estimate a model to explain the role of oil price shocks in the mexican economy. We used the vanillarbc.mod example provided in the web page as an initial model, and added: capital adjustment costs, a ghh utility function and the open economy trade restriction complimented with some form of “disutility” of borrowing (as in Saez Puch 2002).

Using a mix of parameters from the initial model and parameters from other researchers we got the model to run using the original initial values. However, we are having trouble estimating it for the data that we have. The biggest problem is finding suitable initial values that replicate the data.

We would really appreciate it if someone could suggest a method for doing this…

Thank you!

Marlene and Paloma
RBCoilprice.mod (2.19 KB)

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