Simulation of dsge with distorsionary tax

General DSGE Modeling
#1

I have problems to introduce the taxation in capital as in Forni, Monteforte and Sessa " the general equilibrium effects of fiscal policy: estimates for the euro area".

as you can see in the .mod, there’s a variable named br that in my paper exercise is solved as br = b/p. I don’t know how or where I can find a solution for this.

if it’s needed i can put the exercise too. thank you!

EX_01_01.mod (3.2 KB)

#2

Hello, Andres,
Not knowing much about your model, I think you are missing a first order condition with respect to b.
Let me know whether it is that the problem.
Best