I want to replicate the paper by Schmitt-Grohé and Uribe 2003 “Closing Small open Economy models”. I was able to compute the Models 1 and 1a for the endogenous discount factor. Then I tried to compute the Model 2 for the debt elastic interest rate and thats where the struggling began… Actually, I have no clue anymore how to proceed. I would like to have a model in exp() rather than levels to capture the %-age deviations from steady state.
I would appreciate it if someone had a hint on where to start with the corrections.
Thanks for your comments,