Replication files for "No Rake to Step On: Long-Maturity Floating-Rate Debt and the Fiscal Theory of Monetary Policy"
Description
Replication files for the quantitative illustration and Figure 1 of the paper "No Rake to Step On: Long-Maturity Floating-Rate Debt and the Fiscal Theory of Monetary Policy." The replication package contains three Dynare model files implementing a standard New Keynesian model with alternative government budget constraints corresponding to different public debt structures: one-period fixed-rate debt, long-maturity fixed-rate debt, and floating-rate debt. The floating-rate specification corresponds to policy-rate indexation under par valuation. The package also includes a MATLAB script that uses the impulse responses generated by the three Dynare models to reproduce Figure 1 of the paper. No empirical data are used in the paper; all quantitative results are generated from calibrated model simulations. The README file provides the software requirements and replication instructions.
Files
Steps to reproduce
The replication requires MATLAB and Dynare 7.1. Run the files in the following order: 1. Model_OnePeriod_Fixed.mod 2. Model_LongMaturity_Fixed.mod 3. Model_FloatingRate.mod 4. Plot_Figure1.m The three Dynare model files generate: irfs_short.mat irfs_long.mat irfs_floating.mat Plot_Figure1.m uses these files to generate Figure_1.pdf.