Hi,
This is the so-called MX model seen in the book of Schmitt-Grohe and Uribe of International Macro. It is a SOE model with 2 sectors (Mportables and Xportables). I have set up the equilibrium conditions just as described in the text. What is missing is the steady state. As a shortcut solution, I try the “initval” command, but it is not reaching a solution. I need help either solving the steady state analytically or tips on finding proper initial values.
Thanks,tot.mod (4.1 KB)
You did not define the parameter beta and set dbar while the parameter is called d_bar
After fixing that I cannot find the steady state still:
Error using print_info (line 83)
Impossible to find the steady state. Either the model doesn’t have a steady state, there are an infinity of steady states, or the guess values are too far from the
solution
Can I use a solver straight away for the whole system if equations or is that only to complement a few equations?
Dear @jpfeifer and others,
I have written the analytical steady state and it works. The problem is that the model only works as long as the parameters used for both sectors are the same. If the Frisch elasticity for labor supply is different in one sector, then the model is not run. Any explanation behind this?
Thanks,
termstrade.mod (6.5 KB)
Why does it not work? Because the steady state cannot be computed? Your steady state file does not seem to account for asymmetric sectors.
Where can I look for models that account for this? Thanks
Nowhere. You need to sit down with pencil and paper and compute the solution
Dear @jpfeifer,
This is another version of the file. I am very close to finding the steady state but there seems to be a problem with equations 9 and 10. I do not know why, because they are correctly specified. They are important because they are the equations for prices of import- and export goods, that lead to the terms of trade.mx2019a.mod (6.5 KB)
Thanks
You can verify in your computations that your computed ax_o_am is not consistent with the ax and am you compute.
Ok, I am checking that. But that is what the authors do in their Matlab code:
http://www.columbia.edu/~mu2166/book/tot/
@jpfeifertermstrade.mod (7.6 KB)
I have run this model using initial values i get from another file that solved this model analytically. I have used those init values here but I cannot find the steady state, even though in principle, the guesses are not close to the true solution, but should instead be the solution. I have also used the (solve_algo=4, maxit=10000) as you suggest in other posts but I reach no solution. Can you please suggest a way out without going to the analytical option?
If the true steady state values do not solve the model, then there must be a mistake in the model.
I have revised the model plenty of times
Nevertheless, the steady state and the model equations are inconsistent.
can you please elaborate? do you mean the initial values are inconsistent? becuase I removed the steady state and put initval instead
You stated that you fed in the true steady state values. If that is true and they are not what Dynare finds, then the steady state does not match the equations entered. Ergo, there must be something wrong in one of the two things.
Hi, I am trying to replicate the MXN model and I am encountering the same problem. I revised the code and my derivations several times. I couldn’t find what am I doing wrong. I’ got problem at price of importables, the price of exportables, price of non-tradable and price of tradable composite good. I also run the m files provided by uribe and put the steady state values as initvals and it didn’t work… Have you find any solution yet?
@jpfeifer can you please help me out? this code has the following problems:
The code appears to work properly, but the IRFs are not making too much sense. Figure 1 should show IRFs after a level shock, and figure 2 the same for a volatility shock, but the figures show the same responses.
Thanks in advance for the helptotana2019.mod (7.7 KB)
,
Your simulations are starting the the deterministic steady state, but will converge to the stochastic steady state. What you see is mostly the convergence behavior. Please construct proper IRFs. See e.g. https://github.com/JohannesPfeifer/DSGE_mod/blob/master/Basu_Bundick_2017/Basu_Bundick_2017.mod
Yes it’s working now. Thanks very much, I appreciate it