Hi all,

I would greatly appreciate if someone could point me to Dynare codes that (deterministic) simulate a linearized sticky-price/sticky-wage model with a zero lower bound on nominal interest rates.

Thanks.

Hi all,

I would greatly appreciate if someone could point me to Dynare codes that (deterministic) simulate a linearized sticky-price/sticky-wage model with a zero lower bound on nominal interest rates.

Thanks.

Full-linearization and ZLB sound like a contradiction to me.

You should write your model in nonlinear form (at least for the nominal interest rate rule), and have that nominal interest rate rule look like:

i_t = max(0, taylor rule);

Hi,

Thanks for the response. Sorry I was not clearer in my question. Like you suggest, I did mean a model where all the equations other than the interest rate rule are linear.

This is the dominant approach used in ZLB models (at least until recently). I was looking for Dynare codes that do a simple deterministic simulation of this case (the standard NK clsoed economy model). For example, Dynare codes to replicate something like what Jung et al (2005) did in their JMCB paper “Optimal Monetary Policy at the Zero Interest Rate Bound.”

Thanks.