Hi everybody!
I’m new here and have a probably pretty easy question. In this context I try to compare different policy rules like Taylor Rule, Christiano etc. My problem is now, that I have no idea how to integrate the “Smets and Wouters”.
You have to change the
[quote]interest = r400; //
inflation = (100/4)(4pi+4pi(-1)+4pi(-2)+4pi(-3)); //
inflationq = pi400; //
outputgap = x100; //
output = y100; //
//**************************************************************************
//**************************************************************************
// Policy Rule //*
//*
// Monetary Policy //*
//*
interest = cofintintb1interest(-1) //
+ cofintintb2interest(-2) //
+ cofintintb3interest(-3) //
+ cofintintb4interest(-4) //
+ cofintinf0inflationq //
+ cofintinfb1inflationq(-1) //
+ cofintinfb2inflationq(-2) //
+ cofintinfb3inflationq(-3) //
+ cofintinfb4inflationq(-4) //
+ cofintinff1inflationq(+1) //
+ cofintinff2inflationq(+2) //
+ cofintinff3inflationq(+3) //
+ cofintinff4inflationq(+4) //
+ cofintoutoutputgap //
+ cofintoutb1outputgap(-1) //
+ cofintoutb2outputgap(-2) //
+ cofintoutb3outputgap(-3) //
+ cofintoutb4outputgap(-4) //
+ cofintoutf1outputgap(+1) //
+ cofintoutf2outputgap(+2) //
+ cofintoutf3outputgap(+3) //
+ cofintoutf4outputgap(+4) //
+ cofintoutpoutput //
+ cofintoutpb1output(-1) //
+ cofintoutpb2output(-2) //
+ cofintoutpb3output(-3) //
+ cofintoutpb4output(-4) //
+ cofintoutpf1output(+1) //
+ cofintoutpf2output(+2) //
+ cofintoutpf3output(+3) //
+ cofintoutpf4output(+4) //
+ std_r_ *interest_; [/quote]
part. For the Gerdesmeier and Roffia rule that is straightforward, because the variables you need are already defined. For the Smets/Wouters rule this is more complicated, because you would need to define the flex-price output.
Hey jpfeifer. Thanks for your answer.