I am working with the New Keynesian DSGE model under Rotemberg’s price setting. After solving the firm’s problem and log linearizing around a zero-inflation steady state, I end up with the following inflation equation. π_t= βE_(t){π_(t+1)}+(ε-1)/γ〖mc〗_t

Given the duration that a price remains unchanged is 5 months and the annual nominal interest rate is 4 percent on average. The average markup is 10 percent. The model period is one quarter. I want to calibrate, the discount factor β, the elasticity of substitution; and the Rotemberg parameter.

Any kind of guidance is greatly appreciated! Thank you.