Replicating Kaplan, Moll, Violante 2018 TANK model

I’m attempting to replicate the two-asset two-agent NK model KMV introduce in their appendix (A.5). The model is intended to be a TANK analog of their big model. They claim in the appendix that the entire TANK model was solved in dynare, but have not posted the code. I’m having trouble solving for the steady state. Has anyone successfully been able to replicate this? Alternatively, does anyone spot an issue in my mod file (attached)? My guess right now is that the initial values I’ve guessed for the aggregate variables (output, consumptions, assets, etc) are far too low. Thanks.

KMV.mod (4.8 KB) HANK_appendix.pdf (814.7 KB)

  1. I can only recommend trying to compute an analytical steady state. It may reveal issues in the model implementation.
  2. Also note that you are not conforming to Dynare’s timing convention for exogenous states and exogenous processes.
  3. You need to make sure that the computations within your initval-block can be evaluated sequentially. Your setting of w uses rk and m before they have been set.

Hello, I know this is the old post but I was wondering whether you have a solution for this TANK model.