Gali and Monacelli 2005 replication

Hello Sirs,

First Thank you for being there , please bear with me as I am new starter in Dynare.

I am trying to replicate Gali and Monacelli (2005) following your code, but I am facing the following error. I have noticed that the composite parameter defined just below model(linear) is not used in any of the equations, namely, line: 81 #rho = beta^(-1)-1;

Error using SOE.driver
Error: File: driver.m Line: 289 Column: 1
Invalid text character. Check for unsupported symbol, invisible character, or pasting of non-ASCII characters.

  1. In line 152: I think it should be e-e(-1)=0 rather than e=0 as under the peg depreciation is expected to be zero. Right ?

SOE.mod (5.6 KB)

Please use // instead of $ sign in lines of 183 and 184 in your SOE.mod file.

Then run the model again in Dynare to see the results.

Altough it seems that $ sign is in the model to get a latex file in output but I think that this sign causes an error when you run the model.

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  1. Yes, the dollar sign causes the issue.
  2. If e=0, then clearly also e-e(-1)=0. Here, the nominal exchange rate is simply set to 1 (and its log to 0).
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Thanks a lot !