# Questions about using log linearized equations in Occbin

I have a set of log linearized equations from Eggertsson et al. (2019)

I typed the equations as it is on Dynare with model (linear).

For example,

model (linear);
Y = (chi*C_b_ss/Y_ss)*C_b + ((1-chi)*C_ss/Y_ss)*C_s;

Then the resulting output I get will be log deviations. I defined C_b_ss, C_ss, and Y_ss on the parameter block.

My questions are as follows.

1. Is it possible to get a figures like this (Figure 15 from Eggertsson et al. 2019) with my attached .mod files using Occbin? When using Occbin with my attached .mod files, I am able to get a graph for â€śNo boundâ€ť but I am unable to get a graph for â€śstandard modelâ€ť and â€śnegative ratesâ€ť.

1. If so, how do you deal with constraints (Constraint, Constraint relax) for log linearized equations on Occbin?

Below is my attached .mod files. SYP_loglinear is for linear solution, SYP_loglinear_b is for getting piecewise solution. runsim_SYP_loglinear is my Occbin file.

SYP_loglinear.mod (2.6 KB) SYP_loglinear_b.mod (2.7 KB)
runsim_SYP_loglinear.m (3.3 KB)

Any help would really be appreciated.

Thank you

You did not provide information on which paper you are exactly dealing with and what
"No boundâ€ť, â€śstandard modelâ€ť, and â€śnegative ratesâ€ť are meant to denote. My guess is that â€śno boundâ€ť refers to a model without ZLB. You should obtain that picture by running the unrestricted mod-file without Occbin. â€śStandard modelâ€ť seems to be the usual output from Occbin.

1 Like

Sorry Professor Pfeifer, I will clarify my question better in the future, if needed. Currently, I am so close to replicating the figure!

Dear Professor Pfeifer,

Sorry to bother you againâ€¦ what does unrestricted mod-file mean? Is that just a regular mod-file without using Occbin?

Sincerely,

Eric

In case of a single constraint, Occin takes two mod-files as an input, one with the constraint binding and one where the constraint is slack, i.e. the respective variable is unrestricted. I am referring to running the latter file without Occbin.

2 Likes

Okay, I understood now. Thank you for your time professor.