Mendoza 2002 Sudden Stop

Hello Everybody,

Below is my first code of the Occasionally binding constraint model. I think I messed up in the “occbinrun.m” script as the two .mod files are running error free when they are run each one by itself. Appreciate any suggestions that might help in solving my problem and thank you in advance.

*Please note that the first file nooccbin.mod imposes mu=0 (Lagrange multiplier of the occasionally binding constraint) and does not include the the binding constant, whereas occbin.mod does not have the condition of mu=0 but instead imposes the binding constraint. (binding constraint case)

nooccbin.mod (3.3 KB)
occbin.mod (3.4 KB)
occbinrun.m (547 Bytes)

Since Dynare 5 includes a full Occbin implementation, we don’t support the old toolkit anymore. Please transition to Dynare 5.

Problem Solved. Many thanks indeed.