// (8) Spread
theta * mu = sdf * Omega(+1) * (R_K(+1) - R(+1));
// (9) Ex ante MV of net worth
Omega = (1-delta_B) + delta_B*nu;
// (10) Ex post MV of net worth
nu = (sdf*Omega(+1)*R(+1))/(1-mu);
HI,
someone could help me to understand this equations. In particular I don’t understand which variables is Omega in relation to original model’s paper.
You need to be more precise. There are many Gertler/Karadi papers. And whose codes are you using?
Uploading: GK_2011.mod…, this is the code that i’m using for, while these are the two papers, one is the paper model and the last one is an appendix.
GertlerKaradi2011.pdf (527.1 KB)
foerster_appendix2015.pdf (180.4 KB)
The upload did not complete. Who wrote the GK_2011.mod-file?
DSGE-archive/4_Gertler_Karadi_2011/GK_2011.mod at master · DBrizhatyuk/DSGE-archive · GitHub
I tried it on the website GitHub.com, this is the link.
Then you should try to ask the author of that code. Did you test whether it reproduces the IRFs in the paper?
Dmitry Brizhatyuk