I have a simple model of a small open economy that replicates Colombia’s fiscal rule that consists of having a structural balance of 1%.
It is written in the following terms:
%32. Balance estructural objetivo
baesobj is target structural balance
baes is structural balance
pib is GDP
The problem I have is that the fiscal rule is having no effect with any objective goal, that is, if I set a goal of 5%, it gives me the same results as if I put 1% in all the variables. Mathematically I have reviewed the model and I cannot find the reason why the rule is not having effects.
I would appreciate if someone could help me or suggest something to do
actualregla.mod (3.8 KB)