jpfeifer wrote:First of all, your model is not linear, so don't put
- Code: Select all
model (linear);
If you have
- Code: Select all
log(g)=rhog*log(g(-1))+epsg;
then the steady state for g is 1. Put
- Code: Select all
g=1
into initval. The same applies to the other exogenous variables.
@jpfeifer
Thanks for your quick reply. Now the problems turn to other equations, and I think it should be fixed through parameter calibration. Well, I have a quick question for calibration. In my reference paper that I use to code this model, I have got some estimated parameters for calibration. However, some parameters with factors of 400, such as steady state inflation, growth rate and others. Does that means that I have to use quarter value to calibrate the parameters? To be specific, if the steady state inflation is 2% annualized, then the calibrated parameter in the model \pi should be 0.005. Besides, other parameters like steady state interest rate should follow the suite. Right?
Thanks again!