Computer programs for escape dynamics
A set of matlab programs simulate the escape dynamics described in `The Conquest of American Inflation' (Princeton University Press, 1999). The programs are very useful for promoting intuition about the random events and endogenous forces that promote the escape from Nash to Ramsey inflation. The programs were written by Andrea Gerali
GERALI.ANDREA@insedia.interbusiness.it
and Francisco Lippi
lippi.francesco@insedia.interbusiness.it
of the Research Department of the Bank of Italy.
The progams simulate the static version of the model described by Cho, Williams, and Sargent (2001, available on this web page). The programs work in matlab 5 and probably in matlab 6.
The programs use a more general version of the model, in which a weight b for the policy maker's weight on inflation (which I had Cho, Williams, and Sargent and Sargent (Conquest, 1999) both set equal to 1). Gerali and Lippi have a forthcoming paper in which they study the effects of variations of this parameter on the nature and frequency of escapes from Nash.
To run the programs, type escape, then respond to questions.