Canonic New Keynesian (RANK) Model

Workhorse model of monetary transmission:

A canonic RANK model as in Gali (2015), featuring simple time-dependent nominal rigidities and monetary non-neutrality. In the face of supply-side shocks, monetary policy trades off output loss and stabilisation of inflation.
The monetary authority is dominant and commits to respond to inflation (\(\phi_\pi>1\)) aggressively enough to induce a determinate equilibrium. Absent a sufficiently strong commital response, inflation and the nominal side are indetrminate and admit an infinite dimensional family of sunspot equilbria.

Toggle with structural, shock, and policy parameters:

Persistences of fundamental shcoks (cost-push, monetary policy)
Taylor rule reactivity to current inflation and to output deviations from targets
For example, see how \(\phi_\pi\) impacts the pass-through from cost-push shocks to inflation on impact.
Fiscal side:
- Muted in this demo version, but part of next release plans (fiscal dominance, distortionary taxation, etc).

Reuse

Citation

BibTeX citation:

@software{virtual_dsge_lab,
  author = {{Virtual DSGE Lab}},
  title = {Thales 1.0: {Web-Based} {Interactive} {DSGE} {Simulation}
    {Engine}},
  url = {https://virtual-dsge-lab.duckdns.org},
  langid = {en}
}

For attribution, please cite this work as:

Virtual DSGE Lab. n.d. “Thales 1.0: Web-Based Interactive DSGE Simulation Engine.” https://virtual-dsge-lab.duckdns.org.