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)