Interest rate peg

[jpfeifer]

That sounds like a perfect foresight scenario. There must be example codes in the forum. E.g.

Forward guidance shock

Continuing the discussion from Forward guidance shock: I modified the monetary policy rule in your Gali (2008) code . In Mckay et al (2016)’ s paper, they applied an exogenous rule ‘real interest rate = natural rate +future monetary shock’. I replaced Taylor rule in Gali (2008) by ‘r_real=r_nat+ eps_nu(-20)’ in dynare, and got the error ‘blanchard kahn conditions are not satisfied: indeterminacy dynare’. Then, I used ‘r_real=r_nat+phi_pi*pi+eps_nu(-20)’ instead. The model is solved, but I can’…