Dear Mr. jpfeifer,
I’ve downloaded your code Gali_Monacelli_2005.mod, but I was wondering why there is no
Omega in equation (35):
ynat = Gamma*a + alpha*Psi*ystar
rho in equation (37):
rnat = -sigma_a*Gamma*(1-rhoa)*a + alpha*sigma_a*(Theta+Psi)*(ystar(+1)-ystar).
I thought it was to simplify the calculation of the steady state of the model , incorporating constant terms in some definitions. So I’ve tried to written these equations using
Omega with the
Dynare couldn’t find the steady state and I suspect that there is some other equation that I have to adjust to do that. But despite I tried to open all the calculations. In particular, I suspect that equation (35) (natural level of output) is not consistent with equations (22) and (27), since the output is not around
Would you help me, please?