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Introduction to the Article

This paper, authored by Matteo Iacoviello and Raoul Minetti, explores the international transmission of business cycles using a two-country model that accounts for credit market imperfections. The authors specifically examine the differences between domestic and foreign lenders in their ability to recover value from borrowers' assets. This disparity in recovery ability influences the borrowing behavior of entrepreneurs, who adjust their debt exposure and allocation of collateral in response to productivity shocks. The model demonstrates how these dynamics can explain the comovement of output across countries, highlighting the role of credit frictions in international business cycles.

How to Open Dynare in Matlab

I make two version, include liner and non-liner version. To use Dynare within the Matlab environment, follow these steps:

  1. Install Dynare:

    • Download Dynare from the official Dynare website.
    • Follow the installation instructions specific to your operating system.

  2. Add Dynare to Matlab Path:

    • Open Matlab.
    • Add Dynare to your Matlab path using the command: 
      addpath('C:/dynare/4.x/matlab')
    • Replace 'C:/dynare/4.x/matlab' with the actual path to your Dynare installation.

  3. Create a Dynare .mod File:

    • Write your Dynare model code in a .mod file. This file contains the model equations, variable declarations, and simulation commands.

  4. Run the Dynare Model:

    • In Matlab, navigate to the directory containing your .mod file.
    • Run the Dynare model by typing: 
      dynare your_model.mod
    • Replace your_model.mod with the name of your .mod file.

  5. Analyze the Results:

    • Dynare will generate various output files and graphs showing the simulation results.
    • Use Matlab's plotting and analysis tools to further explore and visualize the data.

By following these steps, you can successfully open and run Dynare models within the Matlab environment, enabling you to conduct complex economic simulations and analyses.

If you have any question,Please let me know : crownlun8@gmail.com