Quadratic terms in DSGE
Posted: Thu May 06, 2010 3:16 pm
Hi Tom,
Further to our previous discussions on time variation and regime switching, I tried to calibrate a simple dsge where the interest rate rule is i = a1*y+a2*p^2, i.e. quadratic in the inflation rate. I tried then to extract the impulse responses using the dlmirf and it worked. However I wanted to ask you whether what I got is correct.
Thank you
Further to our previous discussions on time variation and regime switching, I tried to calibrate a simple dsge where the interest rate rule is i = a1*y+a2*p^2, i.e. quadratic in the inflation rate. I tried then to extract the impulse responses using the dlmirf and it worked. However I wanted to ask you whether what I got is correct.
Thank you