Replication attempt of Gerali et. al. (2010)

General DSGE Modeling Replication Attempts
1

Dear Forum,

I am trying to replicate the Gerali et. al. (2010) paper where I have modified the equations a bit to get marginal costs and standard Calvo type wage and price reset equations. I have also calculated the steady states by hand. I am still unable to successfully run the model and keep getting error “Impossible to find the steady state (the sum of square residuals of the static equations is 1.0786).” . If anyone has a clue about what has gone wrong, it will be really helpful.

GNSS2010.mod (24.7 KB)
median_values.txt (675 Bytes)
GERALI_SS.pdf (274.9 KB)

2

I cannot run your code because in

Q_h_ss = (j_h/H_bar)*(  1/((1-beta_p)*lamP_ss) +  1/((1-beta_i - mi_ss*(1/R_bH_ss - beta_i))*lamI_ss));

the j_h was not set.

3

Extremely sorry for the inconvenience. I have set the j_h. It should not give the same error anymore.
GNSS2010.mod (24.5 KB)
median_values.txt (675 Bytes)

4

Put resid; before steady; and you will see a couple of equations with big residuals. Focus on those. There must be a conceptual mistake in either the steady state computation or those equations.