Dear professors, I’m a new for dynare and I need help. First I established a NK model without capital, and the result of operation showed that there should be no problem. Secondly I established a NK model with capital, the result seemed quiet a big problem that output should not increase under the impact of monetary policy. The picture is the impact of monetary policy impact, the result seemed quiet a big problem that output should not increase under the impact of monetary policy.I can’t find out where I was wrong for a couple of days. I’ve been very disturbed. Could anyone help me? Tell me where I was wrong,I would appreciate it very much.deleverage1.xls (28.5 KB)
NKmodelwithoutcapital.mod (2.5 KB)
NKmodelwithcapital.mod (3.3 KB)
Can anyone help me？
Your Euler equations for real capital has inflation in it. That is very unusual.