OccBin - inequality constraints in Galì (2016)

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OccBin - inequality constraints in Galì (2016)

Postby geronz » Sat Jan 07, 2017 12:11 am

Hello!!
I'm working on the new working paper by Galì "The Effects of a Money-Financed Fiscal Stimulus "(Dec 2016) and I have some difficulties/problems with the implementation of ZLB in dynare. ZLB is obtained with a demand shock. Galì replaces the money demand equation:

[ Moneydemand=consumption-eta*interest ]

With

[ (Interest-log(beta))*(moneydemand – consumption +eta*interest) = 0 ]

under two constraints:
1- interest >= log(beta)
2- moneydemand >= consumption – eta*interest

I'm using OccBin (call_solve_two_constraints) but I can't understand how to set the constraints. I attach the wp and the basic mod.
I am a young student so If You could help me I would really appreciate it. I kindly request any advice or suggestion.

Thank you so much
Attachments
gmoney_dec2016-1.pdf
(398.93 KiB) Downloaded 57 times
newfiscalstimulusLT.mod
(1.62 KiB) Downloaded 53 times
Last edited by geronz on Mon Jan 09, 2017 9:12 am, edited 1 time in total.
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Re: OccBin - inequality costraints in Galì (2016)

Postby jpfeifer » Sun Jan 08, 2017 7:18 pm

Sorry, but at the current stage, occbin is an external package. I have not worked with it and have no experience using it. Thus, I am unable to provide support. Maybe other users can help you. Otherwise, you might need to contact its authors.
------------
Johannes Pfeifer
University of Cologne
https://sites.google.com/site/pfeiferecon/
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Re: OccBin - inequality constraints in Galì (2016)

Postby geronz » Tue Jan 10, 2017 2:25 pm

Thank you so much, you have benn very kind. I hope in other users' answers.
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