New Keynesian Model using Python and Dynare++

This repository shows an example of how to use Dynare++ from Python. For this, a New Keynesian Model (Galí Ch.3) is solved. The entire model and .mod file is done in a Python class and only the model solution runs on Dynare++.

The class is structured in 9 functions:

1. init(): initial values.
2. dict_parameters(): parameter dictionary
3. dict_model(): model definition
4. mod_file(): .mod file creation
5. run_model(): run model
6. key_variables(): keys for plot
7. plot_irf(): IRF plot
8. table_vcov(): matrix of variance and covariance
9. table_var(): table of variance

The results are in NKM_basic_model.ipynb, it is structured in:

1. Introduction
2. Dynare model
3. Galí Chapter 3: $\theta=2/3$
4. Monetary, Technology and Phillips Curve shock with different $\theta$ values
5. Monetary, Technology and Phillips Curve shock with different $\theta$ values and without persistent shocks
6. Efficient interest rule