I constructed a model based on Iacoviello(2010) Housing market spillover … , and have some modification.
I exclude monetary sector so all variable presents in real term. I alter patient agent’s housing consumption that patient agent can only rent houses from agent2 , to see how houseprice and houserent act under borrowing constraint.
Some IRFs seems reasonable, but non-durable output(yc) and housing output(IH) seems weird, fltctuates up and down, a little like a oscillating shape, and some variables don’t come back to zeros.
I’ve check model several times but I could not found any mistake from timing and paras. Wish someone can give me some direction.
Here attach a code for log-linearized model, Thank you very much.model.mod (6.9 KB)