New keynesian Model with habit forming consumers
Posted: Sun Apr 07, 2013 10:33 amHi,
I have simulated the benchmark new keynesian model using the output gap consistent with most of the literature. However I have a challenge with trying to incorporate habit formation into the model by adjusting labmda in my original mod file to account for this.
I would be much obliged if anyone could take some few minutes to see what I have done wrong in the attached mod file. All opinions and corrections would be highly appreciated.
I have simulated the benchmark new keynesian model using the output gap consistent with most of the literature. However I have a challenge with trying to incorporate habit formation into the model by adjusting labmda in my original mod file to account for this.
I would be much obliged if anyone could take some few minutes to see what I have done wrong in the attached mod file. All opinions and corrections would be highly appreciated.