I obtain unusual data, when trying to compute parameters from the model equations. For example, for et = lambd * w * (1-h) I obtain 7161994 instead of 1.5 suggested by literature. Eta is a relative weight of leisure, entering household’s utility function
But when e.g. h (number of working hours in year, set to 1834) and w (yearly wage, set to panel average 13124) are entered, value immediately increases.
Another question, would it make more sense to first try to make calibrated model work before introducing it to the real world data? I read this on DSGE parameters - #2 by DoubleBass What could I enter then instead of real world data for consumption, investment etc. to make estimation work?
Model.mod (1.7 KB)
Model_steadystate.m (1.1 KB)