Dear All,
I m trying to replicate the sensitive analysis from section IV of “Smets & Wouters(2007)Shocks & Frictions in US Business Cycles A Bayesian Approach”, to compare the marginal likelihood from each scenario by changing the parameters one at a time.
From estimated_params block, the value of prior parameters from the baseline model needed to change for exercise are listed below:
thetaH (Calvo pricing - domestic goods) = 0.8 to 0.1
thetaF (Calvo pricing - imported goods) = 0.8 to 0.1
kappa (Price Indexation) = 0.5 to 0.1
Cupsilon (habit formation) = 0.5 to 0.1
sytest3.mod (6.3 KB)
Smets & Wouters(2007)Shocks & Frictions in US Business Cycles A Bayesian Approach.pdf (825.1 KB)
mydat1.xlsx (25.6 KB)
Cpsi (Inv. Elasticity of Lab. Supply) = 2 to 1
However, the program was unsuccessful and failed to run and got some errors. Could anyone help to guide me how to go about it?
I attached the files for your review
Thank you very much