% Standard NK model

var pi x u m rn price i; 

varexo e_u  e_m;

parameters rhou rhom beta chi theta 
           pipi pix sigma sigu sigm;

rhou    = 0;               
rhom    = 0.6548;	            
theta   = 0.8554;
pipi    = 1.7251;
pix     = 0.2612;
sigm    = 0.3657;
chi     = 2.0067;
beta    = 0.99;
sigma   = 1;
sigu    = 1;

model(linear);
#kappa   = (1-theta)*(1-theta*beta)*(sigma+chi)/theta;

pi = kappa*x + beta*pi(+1) + u;

x = x(+1) - (rn - pi(+1))/sigma;

rn = pipi*pi + pix*x + m;

u = rhou*u(-1) + sigu*e_u;

m = rhom*m(-1) + sigm*e_m;

pi  = price - price(-1);

i   = 4*rn; 
end;

%model_info;
%steady;

%check;
shocks;
%var e_u; stderr 1;
var e_m; stderr 1;                                                   
end;

stoch_simul(irf=21, order=1, nodecomposition) i price x;