Hi all I hope you are well, I am currently trying to replicate the model; Macroprudential and Monetary Policies: Implications for Financial Stability and Welfare by Margarita Rubio.
This is my first attempt at creating or replicating a model and I have some novice questions. Attached is the model and my attempt at replicating it.
Q1. Theoretically speaking, if I put in the main model equations on p26 in dynare, after I have declared the variables, parameters, initial values and shocks, should the model thoeretically run as in the paper?
I just have no idea how to start replicating the model.
Many thanks for your time, any input is appreciated, I am on a tight deadline to replicate this model!
Macroprudential And MonetaryPolicies Implications for Stability and Welfare.pdf (262.9 KB)
MMPIFSW.mod (2.8 KB)
Dear Professor @jpfeifer thank you very much for your reply, it is very kind of you to help. I have counted 15 variables and 19 equations, though I am not sure if some of the equations should be there; for example, the market clearing equation and the budget constraints, also wb and ws as they are defined twice in the authors ‘main equations section’. Thank you very much for your help.
Jonathan
MandMP.m (2.9 KB)
Macroprudential And MonetaryPolicies Implications for Stability and Welfare.pdf (411.3 KB)
Update: I appear to have 19 equations and 17 variables.
However;
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I am not sure whether q, ns, nb and b should be variables or parameters instead as they are not specified as equations in the author’s paper.
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I am not sure whether the equations for the budget constraints (cb and cs), the wage rates (wb and ws) as they are defined twice each, and the market clearing condition (hs+hb=1), should be included in the number of equations counted.
I have an updated, and more correct mod file uploaded. Thank you again so much for your time, this is really helpful as I have nothing to go by.
I also noted there
MandMP.m (3.4 KB)
Macroprudential And MonetaryPolicies Implications for Stability and Welfare.pdf (411.3 KB)