Hi,
I am new to Dynare and I am trying to compute the optimal monetary policy in a model with an occasionally binding constraint (the zero lower bound). For that purpose, I am also using the OccBin toolkit.
Is there an example file that combines the OccBin toolkit with the ramsey_policy command in Dynare?
I have managed to run both the ramsey_policy command with the unconstrained model and the constrained version of the model using OccBin and the stoch_simul command with no problems. However my attempts to combine ramsey_policy with OccBin have been unsuccesful.
More specifically, when using OccBin we should provide two .mod files, one for when the constraint is not binding and one where the constraint is binding. When using the ramsey_policy command we should provide a model with n endogenous variables and n-i equations where i is the number of instruments. When I use OccBin combined with the ramsey_policy command, it works fine for the unconstrained .mod file but when it starts solving for the constrained file it says that there are more endogenous variables than equations (which is true, since I took those equations out to compute the ramsey_policy).
I am guessing that it is a simple problem of properly declaring that I am using the ramsey_policy command but since I could not find an example file that combines ramsey_policy and OccBin, I don’t know how to do that.
I would greatly appreciate any help
Thanks