README file for the replications files of:
Andrade, Gali, Le Bihan, Matheron, "The Optimal Inflation Target and the Natural Rate of Interest"

This version: 10/28/2020

Software requirements:
- The results were obtained using Dynare 4.4.3 - more recent versions induced a change in some of the functions we used and will require adaptations
- The codes use MATLAB
- The codes use the MATLAB Parallel Computing Toolbow 

All computations are performed in MATFILES.
The TEXFILES folder is there only to store the PDF figures produced in ./MATFILES/SIMULATION/



The MATFILES folder contains the following folders:
COMFILES: common calibration files used by all the programs
DATA: data and data preparation programs
ESTIMTMP: estimation files (MOD file and results)
MODEL: core model MOD file (called via @#include instructions in estimation & simulation programs)
SIMULATION: Simulation programs (detailed below)
UTILITIES: utilities. In particular, simulateModelUnderZlb.m retrieves the matrices A, B, C, D from the function make_ABCD.m and computes the transition transition P,Q via the function my_transition_matrix.
All these functions are adapted from original Dynare functions. The function simulateModelUnderZlb then simulates a trajectory of length Nsample+Nburnin, fed with shocks
stored in the array shocks (common across all simulations).


The scripts in SIMULATION all have self-explanatory names (e.g. doFigure3.m produces figure 3).
