Can anyone tell me why eq number 29 is wrong? It matches the government’s budget constraint with taxes added, but I can’t figure out what I’m doing wrong.
Thanks in advance, I also attach the main equations, although in my case I only added a consumption tax (eq. 1 and 7)
policyshock.mod (7.0 KB)
If the equation is linearized, there must not be i/pic.
Dear professor,
thanks a lot for this advice, I have modify the equation, but the problem now is with the steady state, in particular, CYratio, or perhaps with the value of some parameters.
I have redo the calculates for the government budget constraint and i find the for the log-linearized version uses this definition gt=g-gt/y and then I have divided the the government budget for GDP, y, but something it.s wrong and i don’t understand what.
Thanks in advance
policyshock.mod (7.4 KB)
