Eggertsson AER2008

I’ve never used dynare before and I just want to check with the many dynare experts here whether it is even possible to simulate Eggertsson’s paper “Great Expectations and the End of the Depression” (AER, 2008) using dynare? I just want to know if dynare is the right tool for that type of NKM before spending lots of time writing codes.

If the answer is yes, I would appreciate any relevant examples/threads.

Thank you guys!

Dynare solves stochastic models using perturbation techniques, i.e. a linear approximation if you do first order. If the paper you want to replicate is solved using a local approximation around a steady state, then the answer is yes. If it uses some different solution technique, then no.