Macroeconomic Interdependence in a Two-Country DSGE Model under Diverging Interest-Rate Rules



A. Appendix

A.6. Dynare Program Code for Matlab

periods 1000;

var x_d x_f pi_d pi_f t i_d i_f a_d a_f u_d u_f v_d v_f;

varexo e_af e_ad e_ud e_uf e_vd e_vf;

parameters ALPHA_D ALPHA_F MU_D MU_F OMEGA_D OMEGA_F THETA_D THETA_F IOTA_F XI RHO

BETA ZETA_AD ZETA_AF ZETA_UD ZETA_UF ZETA_VD ZETA_VF PHI_AD PHI_AF;

ALPHA_D=1.5;

ALPHA_F=1.5;

MU_D=.16;

MU_F=.16;

OMEGA_D=.1;

OMEGA_F=.1;

THETA_D=.07;

THETA_F=-.07;

IOTA_F=.5;

XI=-1;

RHO=.8;

BETA=.97;

ZETA_AD=.8;

ZETA_AF=.8;

ZETA_UD=.8;

ZETA_UF=.8;

ZETA_VD=.8;

ZETA_VF=.8;

PHI_AD=.3;

PHI_AF=.3;

model;

x_d=x_d(+1)+1/RHO*pi_d(+1)-1/RHO*i_d+THETA_D*t(+1)+(XI-1)/(XI-RHO)*a_d(+1)-(XI-1)/(XI-RHO)*a_d;

x_f=x_f(+1)+1/RHO*pi_f(+1)-1/RHO*i_f+THETA_F*t(+1)+(XI-1)/(XI-RHO)*a_f(+1)-(XI-1)/(XI-RHO)*a_f;

pi_d=BETA*pi_d(+1)+MU_D*x_d+u_d;

pi_f=BETA*pi_f(+1)+MU_F*x_f+u_f;

t=pi_f-pi_d+i_d(-1)-i_f(-1);

i_d=ALPHA_D*pi_d+OMEGA_D*i_d(-1)+v_d;

i_f=IOTA_F*x_f+ALPHA_F*pi_f+OMEGA_F*i_f(-1)+v_f;

a_d=ZETA_AD*a_d(-1)+PHI_AD*a_f+e_ad;

a_f=ZETA_AF*a_f(-1)*PHI_AF*a_d+e_af;

u_d=ZETA_UD*u_d(-1)+e_ud;

u_f=ZETA_UF*u_f(-1)+e_uf;

v_d=ZETA_VD*v_d(-1)+e_vd;

v_f=ZETA_VF*v_f(-1)+e_vf;

end;

initval;

x_d=0;

x_f=0;

pi_d=0;

pi_f=0;

t=0;

i_d=0;

i_f=0;

a_d=0;

a_f=0;

u_d=0;

35



More intriguing information

1. TWENTY-FIVE YEARS OF RESEARCH ON WOMEN FARMERS IN AFRICA: LESSONS AND IMPLICATIONS FOR AGRICULTURAL RESEARCH INSTITUTIONS; WITH AN ANNOTATED BIBLIOGRAPHY
2. Accurate, fast and stable denoising source separation algorithms
3. Wirkung einer Feiertagsbereinigung des Länderfinanzausgleichs: eine empirische Analyse des deutschen Finanzausgleichs
4. Fighting windmills? EU industrial interests and global climate negotiations
5. Bargaining Power and Equilibrium Consumption
6. QUEST II. A Multi-Country Business Cycle and Growth Model
7. The name is absent
8. The name is absent
9. Integration, Regional Specialization and Growth Differentials in EU Acceding Countries: Evidence from Hungary
10. Models of Cognition: Neurological possibility does not indicate neurological plausibility.