Dear all,
I have a quick question about ZLB and extended path. I have noticed that there are a few posts related to this issue; however, they are very brief. Since I failed in trying out those two options, first I wonder if I imposed wrongly.
model;
…
//?? Taylor’s rule
RNOT=max(0, i(-1)+\gamma_RPI+\gamma_y(y-y(-1))+epsm);
i=RNOT;
…
end;
…
var epsm;
periods 1:10;
values 1000;
end;
(Can I impose more than one var here? I guess yes, right?)
simul(periods=20);
rplot y;
rplot PI;
rplot i;
extended_path(periods=20);
rplot y;
rplot PI;
rplot i;
Is such generic code good?
Thanks in advance.