Taylor Rule, steady state variables
Posted: Tue May 24, 2016 4:35 pmHi,
I would like to replicate a Taylor Rule in Dynare where the GDP is at steady state. I have found in p.15 of "Dynare Reference Manual" for version 4.4.3. However, I don't know how to use this command. Could anyone help me please?
The form of the equation is as follows: int = r -theta*(pi-[Pi at steady state])-rho*(ln(Y)-ln([Y at steady state]))-[Pi at steady state]
Here it is what the Reference Manual says about this topic but it is not clear how to apply it:
Thank you in advance!
I would like to replicate a Taylor Rule in Dynare where the GDP is at steady state. I have found in p.15 of "Dynare Reference Manual" for version 4.4.3. However, I don't know how to use this command. Could anyone help me please?
The form of the equation is as follows: int = r -theta*(pi-[Pi at steady state])-rho*(ln(Y)-ln([Y at steady state]))-[Pi at steady state]
Here it is what the Reference Manual says about this topic but it is not clear how to apply it:
STEADY_STATE (MODEL_EXPRESSION) [Operator]
This operator is used to take the value of the enclosed expression at the steady state. A typical usage is in the Taylor rule, where you may want to use the value of GDP at steady state to compute the output gap.
Thank you in advance!