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`

and no `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 `rho`

and `Omega`

with the `initval`

command.

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 `Omega`

.

Would you help me, please?