I can run my model and I believe my model is correct. but I have a problem: How do I apply for a 5% stable growth in the economy to control inflation assumption in the model?
Untitled2.m (6.73 KB)
qwe.mod (2.32 KB)
Could you be more precise?
I can run my model. but now I want to do with the policy towards controlling inflation by the central bank. My project theme optimal management of oil revenues with the goal of stable economic growth. But I do not know how to show stable growth in this model. Also because of the country’s central bank is not independent of the government, the inflation the policy by the central bank can control, do these things for my ambiguous software, please guide me.
It is still hard to follow. Typically in NK-models, the classical dichotomy holds in the long-run. Thus, growth and inflation are unrelated in the long-run. You just fix the steady state inflation rate and the nominal interest rate will adjust via the Fisher equation.