Page 1 of 1

Quadratic price adjustment cost

PostPosted: Mon Nov 06, 2006 7:13 pm
by trungbui
Hi,
I'm writing a model which has a Rotemberg type of sticky pricing. Do you have any simple examples that I could compare with my Dynare code?
Also, I'd like to ask how to check eigenvalues and be sure which variables they correspond to? I'm running in a situation where 1 eigenvalue is very close to 1 (0.9999) so I want to know which variable is it and have a remedy for it.

PostPosted: Mon Nov 06, 2006 8:09 pm
by MichelJuillard
Unfortunately I don't have such an example. Maybe somebody else who reads the forum will have it.

We will provide in the future a tool to indicate which variables is affected by a given eigenvalue. Until then, I suggest that you remove one variable/equation at the time and check the eigenvalues of the smaller model.

Kind regards

Michel