Reference point as status quo in Aiyagari model

General DSGE Modeling Replication Attempts
1

Aiyagari_lossaversion.zip (147.4 KB)
Hello,

I am modifying Aiyagari model by implementing loss aversion into the uility function, taking the past consumption as the reference point.

I’ve got Aiyagari code and it has aiyagari_obj where it just stands out for utility function to maximise, whereas dynamic programming is done in the separate m.file, so, I don’t know how to hold c_(t-1) and input it into the utility function so that the reference point is updated before the next iteration.

I really look forward to help on it…!!

Best,

Myoung

2

As this question is not Dynare related and you are referring to pieces of code nobody except you knows, I doubt that someone will be able to help you.

3

Thank you for the reply.

I forgot to upload the file, but as it’s (heterogenous) DSGE model and run by MATLAB, I’ve got to try this website. It’d be really grateful if you could have a look on it and let me know any idea from you.

Best,

Myoung