I know that there are already many topics about timing conventions, but I am really struggling to adapt them to my specific case.
I am trying to run a very simplified model inspired from Jakab and Kumhof (2015) “Banks are not intermediaries of loanable funds - and why this matters”. The banking system is taken from the celebrated Gerali model.
My problem is about the timing of some variables (loans, deposits, bank capital). I used the end of the period convention, but it is probably wrong for loans and deposits. What is even more confusing to me is that, according to the authors of the original paper, in Model 1 loans and deposits should be forward looking variables, while in Model 2 they should be predetermined.
I attach the mod files for Model 1 and Model 2 and a short pdf with the equations.
Thank you very much for considering my question,
Model1.mod (3.1 KB)
Model2.mod (3.4 KB)
Question.pdf (123.5 KB)