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Insert_App_1.m

@@ -1,9 +1,9 @@
-% Application 1 - Asset pricing model in Iacoviello and Guerrieri (2015,JME)
+% Example 1' - Asset pricing model in Iacoviello and Guerrieri (2015,JME)
 
 %Calibration
 betta = 0.99;
 rho = 0.5; rho_u = 0.5;
-X1_min = -(1/betta-1); %Lower bound (must be less than q_bar = 0)
+X1_min = -(1/betta-1);  %Lower bound (must be less than q_bar = 0)
 sigma = 5;
 phi = 0.2;
 

Insert_App_2.m

@@ -1,5 +1,5 @@
-% Application 2 - New Keynesian model in Brendon et al. (2013). Parameters
-% here are based on the example in Holden (2022, Supp Appendix, Section E).
+% Policy Application - New Keynesian model in Brendon, Paustian and Yates (2013). 
+% Parameters based on the example in Holden (2023, Supp Appendix, Section E).
 
 %Calibration
 betta = 0.99;

Insert_App_2_FG.m

@@ -1,5 +1,5 @@
-% Application 2 - New Keynesian model in Brendon et al. (2013). Parameters
-% here are based on the example in Holden (2022, Supp Appendix, Section E).
+% Policy Application - NK model in Brendon, Paustian and Yates (2013) + forward guidance. 
+% Parameters based on the example in Holden (2023, Supp Appendix, Section E).
 
 %Calibration
 betta = 0.99;

Insert_App_2_PLT.m

@@ -1,6 +1,6 @@
-% Application 2 - New Keynesian model in Brendon et al. (2013). Parameters
-% here are based on the example in Holden (2022, Supp Appendix, Section E),
-% but the interest rate responds to the price-level (not inflation) gap.
+% Policy Application - New Keynesian model in Brendon, Paustian and Yates (2013). 
+% Parameters excet theta_p based on the example in Holden (2023, Supp Appendix, Section E).
+% Note that the interest rate responds to the price-level gap (not the inflation gap).
 
 %Calibration
 betta = 0.99;

Insert_App_2_loop.m

@@ -1,5 +1,5 @@
-% Application 2 - New Keynesian model in Brendon et al. (2013). For analysis of the M matrix. We 'comment
-% out' certain parameters which are set in the 'loop' file.
+% Policy Application - New Keynesian model in Brendon, Paustian and Yates (2013). 
+% For analysis of the M matrix. We 'comment out' certain parameters set in the 'loop' file.
 
 %Calibration
 betta = 0.99;

Insert_App_2_loop_PLT.m

@@ -1,12 +1,12 @@
-% Application 2 - New Keynesian model in Brendon et al. (2013).  For analysis of the M matrix 
-% in the case of a PLT interest rate rule. We 'comment out' certain parameters which are set in the 'loop' file.
+% Policy Application - New Keynesian model in Brendon, Paustian and Yates (2013).  For analysis of the M matrix 
+% in the case of a PLT interest rate rule. We 'comment out' certain parameters set in the 'loop' file.
 
 %Calibration
 betta = 0.99;
 X1_min = betta-1; 
 %sigma = 1;
 kappa = (1-0.85)*(1-0.85*betta)*(2+sigma)/0.85;
-rho_i = 0.4;
+rho_i = 0;
 %thetta_pi = 1.5;
 thetta_p = thetta_pi;
 thetta_y = 0;

Insert_Example_2.m

@@ -1,4 +1,4 @@
-%Fisherian model: ZLB-truncated Taylor rule + Fisher equation (Example 2 from Holden,2022, REStat)
+%Fisherian model: ZLB-truncated Taylor rule + Fisher equation (Example 2 from Holden 2023, REStat)
 
 %Calibration
 r = 0.01;

Insert_RBC.m

@@ -1,4 +1,4 @@
-% Extra Application (Supplementary Appendix) - RBC model with a contraint
+% Example 2' (Supplementary Appendix) - RBC model with a contraint
 % on investment. The calibration here follows the baseline exercise in
 % Iacoviello and Guerrieri (2015, Section 4).
 

Insert_Samuelson.m

@@ -0,0 +1,41 @@
+% Example 3' (Supplementary Appendix) - Endogenous business cycles.
+% Samuelson multiplier-accelerator model with forward-looking expectations  
+% and an upper bound G_max on government expenditure.
+
+%Calibration
+a = 0.025;
+b = 0.70;
+d = 1.3;
+betta = 0.05;
+Tax = 0.01;
+thetta = 0.055;
+I_SS = 0.20;
+G_SS = 0.082;
+G_max = 1.035*G_SS;
+
+%Find steady state
+Y_SS = (a-b*Tax + I_SS + G_SS)/(1-b);
+C_SS = a + b*(Y_SS-Tax);
+
+%Lower bound
+X1_min = -G_max;
+
+%Matrices for xstar
+F = [zeros(1,11) thetta]; G = 0; H = -(thetta*Y_SS+G_SS);
+
+%Reference regime
+B1 = [1 0 0 0; 0 1 0 0; 0 -d 1 0; 1 -1 -1 1];
+B2 = [0 0 0 0; 0 0 0 b*betta; 0 -d*betta 0 0; 0 0 0 0];
+B3 = [0 0 0 thetta; 0 0 0 b*(1-betta); 0 -d*(1-betta) 0 0; 0 0 0 0];
+B4 = [0;0;1;0];
+B5 = [-G_SS-thetta*Y_SS; a-b*Tax; I_SS; 0];
+
+%Alternative regime
+B1_tild = B1;
+B2_tild = B2;
+B3_tild = [0 0 0 0; 0 0 0 b*(1-betta); 0 -d*(1-betta) 0 0; 0 0 0 0];
+B4_tild = B4;
+B5_tild = [X1_min; a-b*Tax; I_SS; 0];
+
+
+