Calvo price setting

Stochastic simulations
1

Hi, I have a new Keynesian model with Calvo price stickiness.
according to NK_baseline.mod in dynare examples,I made my three equations.
in NK_baseline.mod you use epsi*g1=(epsi-1)*g2.when I use this,my graphs are logical but dynare steady state for MC and my calculation is not matching.
so i use another equation that matches dynare steady state and my steady state. but my graphs are strange.
I attach my dynare code,plese see part %philips curve=supply side of economy.
thank you.
simulation_nodebt.mod (12.5 KB)

2

This simply suggests there is still a mistake in your specification. You need to find out what is wrong.

3

I must use epsi*g1=(epsi-1)g2 or other things?

4

Often, yes. See DSGE_mod/Derivation_Recursive_Pricing_Equation.pdf at master · JohannesPfeifer/DSGE_mod · GitHub