From 0668025f32a6619e322f9128aee542f5d2719fac Mon Sep 17 00:00:00 2001
From: Johannes Pfeifer <jpfeifer@gmx.de>
Date: Fri, 27 Dec 2024 15:19:48 +0100
Subject: [PATCH] :bug: discretionary_policy: account for case without lags
---
.../discretionary_policy_1.m | 2 ++
meson.build | 1 +
.../NK_discretion_forward.mod | 27 +++++++++++++++++++
3 files changed, 30 insertions(+)
create mode 100644 tests/discretionary_policy/NK_discretion_forward.mod
diff --git a/matlab/discretionary_policy/discretionary_policy_1.m b/matlab/discretionary_policy/discretionary_policy_1.m
index d75dd9718d..ec1be205bf 100644
--- a/matlab/discretionary_policy/discretionary_policy_1.m
+++ b/matlab/discretionary_policy/discretionary_policy_1.m
@@ -113,5 +113,7 @@ T=H(dr.order_var,dr.order_var);
dr.ghu=G(dr.order_var,:);
if M_.maximum_endo_lag
Selection=M_.lead_lag_incidence(1,dr.order_var)>0;%select state variables
+else
+ Selection=[];
end
dr.ghx=T(:,Selection);
diff --git a/meson.build b/meson.build
index 13e0c01d97..474bb060fc 100644
--- a/meson.build
+++ b/meson.build
@@ -1069,6 +1069,7 @@ mod_and_m_tests = [
'discretionary_policy/dennis_1_estim.mod',
'discretionary_policy/dennis_1_estim_MoM.mod' ] },
{ 'test' : [ 'discretionary_policy/Gali_discretion.mod' ] },
+ { 'test' : [ 'discretionary_policy/NK_discretion_forward.mod' ] },
{ 'test' : [ 'discretionary_policy/Gali_2015_chapter_3.mod',
'discretionary_policy/Gali_2015_chapter_3_nonlinear.mod' ] },
{ 'test' : [ 'histval_initval_file/ramst_data_generate.mod',
diff --git a/tests/discretionary_policy/NK_discretion_forward.mod b/tests/discretionary_policy/NK_discretion_forward.mod
new file mode 100644
index 0000000000..c5d36dec48
--- /dev/null
+++ b/tests/discretionary_policy/NK_discretion_forward.mod
@@ -0,0 +1,27 @@
+var pi x R;
+
+varexo epsilon;
+
+parameters beta kappa lambdax lambdaR sigma;
+
+sigma = 1;
+beta = 0.99;
+kappa = 0.102;
+lambdax = 0.1;
+
+model(linear);
+pi = beta*pi(+1)+kappa*x+epsilon;
+x = x(+1)-(1/sigma)*(R-pi(+1));
+end;
+
+shocks;
+var epsilon; stderr 0.01;
+end;
+
+planner_objective (pi^2 +lambdax*x^2);
+
+discretionary_policy(instruments=(R),irf=20,planner_discount= beta);
+
+
+
+
--
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